Broker upgrades Bajaj Finance to Buy, sees ₹1,300 target
A brokerage has upgraded Bajaj Finance to Buy with a ₹1,300 target price, citing strong Q1 FY27 earnings, stable funding costs, gold-loan growth, digital execution and improving asset quality.
What happened
Bajaj Finance reported strong Q1 FY27 growth, with PAT up 28% and NII up 23%. The brokerage upgraded the lender to Buy with a ₹1,300 target, citing stable
Key facts
- Target price: ₹1,300
- CMP: ₹1,141.70
- Q1 FY27 PAT: about ₹6,080 crore, up 28% YoY
- Q1 FY27 NII: ₹12,570 crore, up 23% YoY
- Non-interest income: ₹2,650 crore, up 11% YoY
- Operating expenses: ₹5,010 crore, up about 23% YoY
- PPoP: ₹10,140 crore, up 19% YoY
- Valuation: 3.9x FY28E P/BV and about 20x P/E
- Projected FY26-FY28E PAT CAGR: around 30%
- FY28E RoA/RoE: 4.2%/21%
- Target valuation: 4.8x FY28E BVPS
Why this matters
For financial-services dealmakers, Bajaj Finance’s performance reinforces the strategic value of scalable digital distribution and secured-lending capabilities.
What to watch
- Quarterly AUM growth sustaining above market expectations
- Credit-cost trend and Stage 2/Stage 3 asset-quality indicators
- Net interest margin and incremental cost of funds
- Gold-loan disbursement growth and loan-to-value discipline
- RBI actions affecting unsecured lending, capital requirements or NBFC liquidity
- Digital customer-acquisition costs, active customer growth and cross-sell conversion
- Consensus earnings revisions and stock performance relative to the ₹1,300 target
- Track whether other brokerages raise FY27-FY28 profit estimates and target prices after the upgrade.
- Watch management commentary on unsecured personal-loan growth, rural lending and gold-loan mix for signals of portfolio-risk migration.
- Monitor deposit growth, bank/NBFC borrowing spreads and liquidity conditions to test the stable-funding-cost assumption.
- Compare loan growth, net interest margins and credit costs with major NBFC and private-bank peers.
- Assess whether a stronger Bajaj Finance share price improves consumer and merchant confidence in its digital ecosystem, supporting cross-sell of payments, insurance and retail-finance products.