Bajaj Finance reported Q4FY26 PAT of ₹5,500 crore, in line with estimates, according to reports from The Hindu BusinessLine. The strong performance was driven by robust AUM growth of 22% to ₹5.1 lakh crore, with broad-based traction across multiple segments including mortgages, consumer B2C, gold loans, securities lending, urban sales finance, commercial lending and rural sales finance. The company maintained its cautious stance in SME lending, though management guided for double-digit growth revival in Q2-Q3FY27F.
Gross stage-3 assets ratio declined to 1.01% due to broad-based easing of stress, as reported by The Hindu BusinessLine. Credit cost guidance for FY27F is set at 1.45-1.6%, indicating improved asset quality trends. The company's calculated NIM stood at 9.5%, while cost of funds declined to 7.41%, with management providing guidance of near-term moderation due to geopolitical tensions. Non-interest income is expected to grow 16-18% in the coming period.
New segments including gold loan, commercial vehicle loans and tractor loans are expected to grow at an accelerated pace, according to The Hindu BusinessLine. The cross-sell franchise remained an integral feeder to personal loans, car loans and two-wheelers. The company's superior cross-sell franchise and tech stack continue to provide competitive advantages over peers in the lending sector.
InCred Equities maintains an Add rating with a target price of ₹1,200, corresponding to about 4.5x FY28F BV and about 23x FY28F EPS, as reported by The Hindu BusinessLine. The broker noted that Bajaj Finance continues to remain a well-oiled lender with superior cross-sell franchise and tech stack providing edges over peers. However, they remain watchful for management transition and NIM pressure, with any correction in stock price potentially sweetening the risk-reward ratio.
