Hold Bajaj Finance: target of Rs 1050: ICICI Securities

ICICI Securities's research report on Bajaj Finance

Bajaj Finance (Bajaj)’s Q2FY26 financial performance was impacted by elevated credit cost in MSME and captive 2W/3W loan segments. 2W’s share of captive stands at 1.5% of total AUM; however, it contributes 9% to total credit during Q2FY26. Bajaj has also slashed MSME unsecured volumes by 25% given persistent stress in MSME since early Q1FY26. While H1FY26 credit cost remained elevated at >2% due to Q1 seasonality and higher stress in MSME and 2/3W in Q2, it highlighted that asset quality (AQ) trends for portfolio disbursed post Feb’25 for 3M/6M/9M month-on book are encouraging; hence, Bajaj expects full-year FY26 credit cost to remain within its guidance range of 185 195bps.

Outlook

Maintain HOLD with a revised TP of INR 1,050 (vs. INR 910) – standalone business valued at 4.5x Mar’27E BVPS (earlier 4.5x Sep’26E) and INR 165 towards housing subs.