Investors hammered Bajaj Finance shares with an 8% plunge on Tuesday, erasing recent gains as the non-banking financial company tempered its expansion forecasts amid regulatory headwinds and softening consumer demand.
The stock cratered to an intraday low of ₹1,002 on the Bombay Stock Exchange, down 7.65% from Monday's close, dragging parent Bajaj Finserv down 7.58% to ₹1,957.80. Trading volume spiked to over 5.6 million shares early in the session, reflecting widespread profit-booking after the firm's Q2 earnings release late Monday.
Bajaj Finance reported a robust 22% year-on-year jump in net profit to ₹4,875 crore for the July-September quarter, beating analyst estimates of ₹4,600 crore. Assets under management (AUM) grew 26% to ₹3.29 lakh crore, driven by strong disbursements in rural and urban consumer segments. New loans originated hit 10.2 million, up 15% from last year, with digital channels accounting for 40% of the mix.
Yet, the market fixated on the company's revised guidance. Management now projects AUM growth of 25-27% for fiscal 2026, down from an earlier 30% target, citing tighter lending norms from the Reserve Bank of India on unsecured loans. Elevated provisioning for bad loans, at 1.8% of the portfolio, further clouded the outlook, as non-performing assets ticked up to 1.2%.
Analysts swiftly downgraded the stock. Bernstein set a new target of ₹640, slashing it from ₹1,200, while Jefferies cited margin compression risks from higher funding costs. "The guidance cut signals caution in a high-interest-rate environment," said a Jefferies note, rating it "underperform." HSBC maintained a "hold" but trimmed its price target to ₹1,100, emphasizing the need for diversified funding sources.
Bajaj Finance's deposit book expanded 20% to ₹62,000 crore, bolstering liquidity with a loan-to-deposit ratio of 5.3 times. Net interest margins held steady at 10.2%, but operating expenses rose 18% due to tech investments in AI-driven credit scoring.
