Shares of Bajaj Finance on Tuesday (November 11) took a hit, tumbling over 6% in early trade after the company trimmed its FY26 growth guidance, even though its July–September quarter performance broadly met market expectations. The stock fell to around Rs 1,015, while its associate firm Bajaj Finserv also dropped 6.5% to Rs 1,981 ahead of its quarterly results.

The company's decision to lower its FY26 AUM growth target to 22–23%, down from earlier projections, came as a surprise to investors. Bajaj Finance cited slower momentum in the SME and housing loan segments as the reason for its cautious outlook.

Strong Performance, but Asset Quality Slips

Despite the muted guidance, the company's quarterly performance remained solid. Net profit rose 22% year-on-year to Rs 4,875 crore, while net interest income grew by the same margin to Rs 10,785 crore. Bajaj Finance's assets under management (AUM) climbed 24% to Rs 4.62 lakh crore, and its customer base expanded to 110.6 million, with 4.1 million new customers added during the quarter.

However, there was a slight dip in asset quality, gross NPAs increased to 1.24% from 1.03% in the previous quarter, while net NPAs stood at 0.6%.

Analysts See Opportunity in the Dip

While the stock saw a sharp fall, most brokerages remain optimistic about Bajaj Finance's long-term prospects, calling the correction a short-term overreaction.

Morgan Stanley maintained its Overweight rating with a target of Rs 1,195, saying the trimmed growth guidance might weigh on sentiment but could open buying opportunities. It pointed out that credit costs are likely to fall further, helping the company sustain margins.

HSBC also reiterated its Buy call and raised its target to Rs 1,200, highlighting Bajaj Finance's stable profitability and disciplined cost structure. The firm expects AUM growth to pick up and earnings to grow at 28% CAGR between FY26 and FY28.

Jefferies, with a Buy and target price of Rs 1,270, said Bajaj Finance's profit growth was slightly ahead of expectations, supported by strong festive-season demand. The brokerage expects credit costs to normalise over the coming quarters.

CLSA rated the stock Outperform with a Rs 1,200 target, praising its steady margins and strong secured loan growth, though it noted a marginal increase in credit costs.

However, Bernstein struck a more cautious note, retaining an Underperform call with a Rs 640 target, citing rising NPAs and scale-related cost pressures. It added that Bajaj Finance is tightening costs and streamlining operations to maintain profitability.

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