Bajaj Finance Shares Jump 7% As Q1 Profit Rises 27% 

Mumbai, July 31: Shares of Bajaj Finance surged 7% in morning trade on Friday, emerging as the top gainer on the Nifty 50, after the non-banking financial company reported a strong June-quarter performance and upbeat management commentary prompted brokerages to raise their target prices. 

The stock’s rally came after Bajaj Finance reported a 27% year-on-year increase in consolidated net profit to ₹5,986 crore for the first quarter, ahead of estimates. Net interest income (NII) rose 23% to ₹12,571 crore, although it was below estimates. 

Asset Quality Improves 

Asset quality showed a notable improvement during the quarter, with the company’s gross non-performing assets (NPA) declining to 0.96% from 1.03% in March. Net NPA also eased to 0.39% from 0.50%. 

The company recorded 24% growth in assets under management (AUM), while credit costs eased to 1.54%, helping support the 27% rise in quarterly profit. Return on assets remained healthy at 4.7%. 

The improvement in asset quality was one of the key factors behind the positive analyst reaction, with brokerages highlighting the lender’s ability to maintain strong growth while keeping credit risks under control. 

Brokers Bullish 

Brokers retained Outperform rating on Bajaj Finance, saying profit after tax beat estimates, supported by stronger-than-expected NII, pre-provision operating profit and lower credit costs. 

They also highlighted the sharp improvement in asset quality and said the company could comfortably outperform its full-year credit-cost guidance of 1.45%-1.6%. They also described management’s commentary during the post-results analyst call as strong. 

Some brokers described the June quarter as exceptionally strong across key operating metrics. 

They raised estimates for AUM growth, net interest margin and credit costs, resulting in 1%-6% earnings upgrades for FY27-FY29. 

Stock jumped as investors cheered results. Source: NSE 

They said management appeared confident about scaling up the business while maintaining current profitability levels. They also pointed to improving asset quality trends in the personal and business loan segments. 

Analysts said June-quarter earnings exceeded expectations on the back of healthy operating performance and robust asset quality. 

They expect the company’s cost of funds to remain broadly under control, although they sees a modest upward bias.  

However, not all brokerages turned bullish. Some retained Underperform rating, despite acknowledging the strong quarterly performance. 

They said the quarter benefited from 24% AUM growth, stable net interest margins and improving asset quality, while lower credit costs of 1.54% contributed to the 27% rise in earnings. They also noted that gross NPA improved to 0.96% and return on assets stood at 4.7%, but maintained that the stock offered limited upside at current valuations. 

Bajaj Finance shares have gained 15% so far in 2026, outperforming the Nifty 50, which has declined around 7% over the same period. The company currently commands a market capitalisation of around ₹7 lakh crore. 

The sharp rally in the stock on Friday reflects renewed investor confidence following the strong Q1 performance, improving asset quality and positive management commentary. With brokers raising their targets, the Street is increasingly focused on whether Bajaj Finance can sustain its strong loan growth and profitability while keeping credit costs under control. 

Source

• https://www.nseindia.com/get-quote/equity/BAJFINANCE/Bajaj-Finance-Limited