Bajaj Finance shares rally 5% after Q1 results. What Nomura, Nuvama, other brokerages expect

Shares of Bajaj Finance rallied 5% to Rs 1,108 on the BSE on Friday after the non banking financial company reported a 28% year-on-year growth in its standalone net profit at Rs 6,081 crore for the first quarter of FY27, with some brokerages raising target prices for the stock after the earnings print.

The company on Thursday reported a rise in net profit from Rs 4,765 crore recorded during the corresponding quarter of the previous financial year. Its net interest income (NII), meanwhile, increased 23% YoY to Rs 12,571 crore during the quarter under review.

Bajaj Finance’s AUM rose by Rs 36,969 crore during the first quarter. The company booked 16.13 million new loans in Q1, up 20% from 13.49 million in Q1 of FY26. Its customer franchise rose 17% to 124.43 million from 106.51 million a year ago, and the company added 5.1 million customers during the quarter.

Asset quality improved during the quarter. Gross NPA stood at 0.96% as of June 30, 2026, compared with 1.03% a year earlier. Net NPA stood at 0.39%, compared with 0.50% last year. Provisioning coverage ratio on stage 3 assets was 60%.

Nuvama on Bajaj Finance share price

Nuvama said Bajaj Finance posted a good set of numbers in Q1 with strong AUM growth of 24% YoY, stable NIMs unlike peers, steady improvement in asset quality and lower credit cost on guided lines, leading to profit beating estimate by 5%. Management guided for continued growth momentum while delivering profit growth ahead of AUM, led by cost discipline and risk management, it noted.

With growth re-accelerating and asset quality holding up well, leading to lower credit cost, Nuvama expects Bajaj Finance to deliver healthy RoA and RoE of around 4.1% and 20–21% respectively over FY27–29. However, due to its higher valuations, the brokerage has a ‘Hold’ rating on the stock.

Nuvama increased its target price for the shares of Bajaj Finance to Rs 1,175 apiece from Rs 1,050 apiece. The latest target price implies over 11.5% upside potential from the stock’s previous closing price of Rs 1,053.5 apiece on NSE.

Also read | Bajaj Finance Q1 Results: Profit jumps 28% YoY to Rs 6,081 crore, NII surges 23%

Nomura

Nomura said that Bajaj Finance’s strong asset quality performance stole the show. The company’s operating profits were in line with the international brokerage’s estimates, but credit cost beat its and consensus estimates by 9%. “Despite the encouraging trends, management still highlighted global events related to uncertainty and monsoon fears in India. It plans to observe trends for another quarter before making any revision to guidance,” it noted.

Nomura continues to like Bajaj Finance among NBFCs and maintains its ‘Buy’ rating with a target price of Rs 1,140 apiece, implying an upside potential of more than 8% from the stock’s previous closing price.

Motilal Oswal

Motilal Oswal upgraded its rating on the shares of Bajaj Finance to ‘Buy’ and increased its target price to Rs 1,300 apiece, implying 23% upside potential. The domestic brokerage said the NBFC is firing on all cylinders, moving beyond the earnings normalization phase and entering a period of structurally higher earnings growth.

“The combination of broadbased loan growth, resilient margins, improving asset quality and declining credit costs is driving a meaningful acceleration in profitability. At the same time, new growth engines, including digital platforms, rapid gold loan expansion and new business launches, provide incremental optionality,” the domestic brokerage said as it raised its earnings estimates for Bajaj Finance.

Bajaj Finance share price

Bajaj Finance shares gained over 4% in a week and 5% in a month to close at Rs 1,053.50 apiece on Thursday. The stock has overall gained more than 20% in a year and nearly 45% in three years. In the longer term, it has delivered 70% returns over five years.

The stock is up 9% in 2026 so far and currently has a P/E ratio of nearly 34x. The company’s market capitalisation stands at Rs 6.59 lakh crore.

Also read | Bajaj Finance posts 28% growth in net profit amid healthy loan demand

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)