Jefferies backs Bajaj Finance, Chola and Shriram as auto-loan demand stays resilient
Jefferies sees resilient vehicle-finance disbursements and stable asset quality supporting Bajaj Finance, Cholamandalam, Aditya Birla Capital and Shriram Finance. The view signals continued credit support for auto purchases, with Chola and Shriram gaining in commercial-vehicle finance.
What happened
Jefferies favours Bajaj Finance, Cholamandalam Investment and Finance, Aditya Birla Capital and Shriram Finance as resilient auto-loan disbursements and stable
Key facts
- Vehicle finance loans were approximately Rs 21 trillion as of June 2026
- Vehicle finance represented approximately 11% of total credit
- NBFCs held approximately 65% market share in commercial-vehicle financing
Why this matters
The strength in commercial-vehicle finance makes partnerships with Chola and Shriram strategically attractive for OEMs, dealers and mobility platforms seeking to expand financed sales.
What to watch
- Monthly vehicle wholesale and retail registrations, especially commercial vehicles, tractors, two-wheelers and entry-level passenger vehicles.
- Disbursement growth, loan approval rates, loan-to-value ratios and competitive pricing disclosed by Bajaj Finance, Cholamandalam, Shriram Finance and Aditya Birla Capital.
- Stage-2 loans, gross NPA trends, collection efficiency and credit-cost guidance in NBFC quarterly results.
- Dealer inventory days, manufacturer incentive intensity and the mix of financed versus cash vehicle purchases.
- Freight rates, diesel prices, rural income indicators and small-business cash-flow conditions that influence commercial-vehicle repayment capacity.
- RBI policy signals, system liquidity and NBFC borrowing costs, which determine whether lenders can sustain attractive vehicle-finance pricing.
- Auto retailers and dealer groups may preserve inventory commitments rather than cut orders aggressively during the softer quarter.
- Vehicle manufacturers could prioritize financing-led promotions, exchange offers and longer-tenor products over broad cash discounts.
- Commercial-vehicle dealers may increase focus on fleet, used-vehicle and replacement-cycle customers as finance availability improves.
- Retailers in tyres, batteries, lubricants, insurance and repair services could benefit from a larger financed vehicle base and higher utilization of commercial fleets.
- Competing banks and NBFCs may respond with selective rate cuts or faster approvals, compressing lending spreads but widening credit access.