Whalesbook
- AUM Milestone Lifts Bajaj Finance Shares
Bajaj Finance's share price surged sharply, boosted by its strong growth in Assets Under Management (AUM), a key performance metric. This rally comes amid concerning trends in deposit mobilization and the company's long-term growth strategy, according to market analysts.
- Q4 Update Fuels AUM Growth and Stock Rise
In its fourth-quarter business update, Bajaj Finance revealed its AUM surpassed the ₹5 lakh crore milestone, reaching ₹5.10 lakh crore as of March 31, 2026. This represents a healthy 22% increase year-on-year from ₹4.17 lakh crore, meeting management's guidance for FY26 AUM growth. Operationally, the company booked 12.89 million new loans, up 20.5% year-on-year, expanding its customer base to 119.33 million. The stock responded positively, trading up over 7% on April 8 and reclaiming the ₹900 level, marking its strongest single-day gain in two months.
Bajaj Finance’s Price-to-Earnings (P/E) ratio was about 32.35 as of April 7, 2026. Its 14-day Relative Strength Index (RSI) stood at 37.89 as of March 28, indicating neutral market conditions.
- Sector Trends and Peer P/E Comparison
Compared to peers, Bajaj Finance’s P/E ratio of 28-32 is higher than major banks like HDFC Bank (15-19) and ICICI Bank (15-19), but falls within the range of some NBFCs such as Cholamandalam Investment and Finance (24-26) and Shriram Finance (18-19).
In the broader Indian banking sector, Q4 FY26 saw credit grow 13.8% year-on-year and deposits 10.8%, with private banks generally leading public sector banks in deposit growth. The NBFC sector overall is projected to see AUM growth moderate to 18.5% in FY26. This slowdown is influenced by tighter bank funding and a more cautious lending approach due to asset quality worries in segments like microfinance and unsecured business loans.
- Macquarie Flags Growth Slowdown, Deposit Woes
However, Macquarie has raised significant concerns. The brokerage maintains an 'Underperform' rating with a price target of ₹860. Macquarie points out that Bajaj Finance's reported FY26 growth rate is its slowest in 15 years, excluding the pandemic-impacted FY21. The firm notes increasing challenges in maintaining both growth and return on assets (ROA) above 4.0% as the company expands.
Crucially, Bajaj Finance's deposit book contracted 4% year-on-year and 3.5% sequentially, now standing at ₹68,550 crore. This means deposits now account for about 16% of total borrowings, down from a peak of 20-22%. This contraction suggests potential future funding cost pressures and growth limits if deposit raising doesn't accelerate, contrasting with the strong asset growth reported.
Macquarie identifies key risks including loan growth that strains funding beyond expectations, and any further upside to margins and return ratios that could challenge their assessment.
- Outlook: Balancing Growth and Funding
Investors will closely watch how Bajaj Finance balances aggressive asset growth with the critical need to boost its deposit base. Management's guidance on sustained profitability and asset quality will be key to determining if current market optimism is warranted, or if underlying funding and growth concerns will eventually affect performance.