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Bajaj Finance's stock climbed 4.3% after the company announced robust financial results for the fourth quarter of FY26. The surge occurred as the broader stock market experienced a decline, highlighting investor confidence in Bajaj Finance's performance.
Key Financial Highlights
The non-banking financial company (NBFC) reported a net profit of ₹5,553 crore, marking a significant 22% year-on-year increase. Revenue from operations reached ₹21,606.50 crore for the quarter. A key milestone was Assets Under Management (AUM) crossing the ₹5 lakh crore mark, reaching ₹5.09 lakh crore, a 22% year-on-year increase. Loan disbursals also saw strong growth, with 12.89 million new loans booked, a 20% rise from the previous year. The company's board recommended a final dividend of ₹6 per share.
Market Performance Contrasts with Broader Decline
While Bajaj Finance's shares rose to ₹970.1 on April 30, 2026, the benchmark BSE Sensex fell by 1.12%. This outperformance underscores the market's positive reaction to Bajaj Finance's earnings report.
Analyst Views and Valuation
Bajaj Finance currently trades at a Price-to-Earnings (P/E) ratio of approximately 29.9 to 31.9. This valuation is notably higher than the Indian Consumer Finance industry average of around 20x and a peer average of 23.8x. Analysts at Motilal Oswal and JM Financial, while raising targets to ₹1,000 and ₹1,080 respectively, acknowledge this premium. Management has guided for AUM growth of 22-24% in FY27 and Profit After Tax (PAT) growing slightly ahead of AUM.
Concerns and Risks
Despite the strong performance, some analysts express caution. Motilal Oswal noted expected near-term Net Interest Margin (NIM) compression. Analysts at Macquarie and Bernstein, who maintain 'Underperform' ratings, suggest Bajaj Finance's FY27 growth and return targets could be overly optimistic. The reported increase in Gross Non-Performing Assets (NPAs) to 1.01% from 0.96% year-on-year, though still relatively low, warrants scrutiny, especially given broader sector concerns around asset quality in segments like MSMEs.
Leadership Transition and Future Strategy
The company is also navigating a leadership transition, with Rajiv Bajaj set to step down from the board at the upcoming annual general meeting. While this is a planned departure, it introduces a period of adaptation for board dynamics, even as the company commits to strategic investments in AI to enhance its operations.
Sector Outlook and Brokerage Adjustments
The broader NBFC sector is projected to see AUM growth of 15-17% in FY26, driven by retail and MSME demand. However, rising borrowing costs present a challenge. Following Bajaj Finance's results, brokerage firms have adjusted their targets. JM Financial has a 'Buy' rating with a ₹1,080 target, projecting strong loan and EPS growth. Motilal Oswal maintains a 'Neutral' stance with a ₹1,000 target, seeing limited immediate catalysts for a re-rating. Emkay Global Financial Services rates the stock 'Reduce' but raised its target to ₹950, citing strong growth and profitability but highlighting credit cost trends. The company updated its credit cost guidance to 1.45-1.6% for FY27.