Bajaj Finance shares trade flat on missing Q3 estimates, brokerages see steady profitability outlook

Bajaj Finance shares rise in trade.

• Bajaj Finance Q3 profit fell 6 percent to Rs 4,066 crore, missing estimates.
• Income rose to Rs 21,215 crore, AUM improved to Rs 4.88 lakh crore.
• Brokerages noted higher provisions and one-off costs but improving asset quality.

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Shares of Bajaj Finance traded largely flat on Wednesday after the non-banking finance company reported a December-quarter profit that fell short of estimates, weighed down by higher provisions and one-off expenses.

The stock slipped to an intraday low of Rs 944.15 on the NSE before recovering most of the losses. At around 1.45 pm, shares were trading at Rs 970.20, up 0.6 percent.

Brokerage Jefferies, which has a ‘buy’ rating on the stock with a target price of Rs 1,270, said the December-quarter profit missed expectations due to one-time provisions and labour-law related costs. It added that core profit rose about 23 percent year-on-year after adjusting for one-offs.

Jefferies noted that loan growth moderated to 22 percent year-on-year, but said asset quality improved and the company’s credit cost guidance was encouraging. It continues to maintain Bajaj Finance as a top pick.

Antique Stock Broking, which has a ‘buy’ call with a target price of Rs 1,070, said higher provisions impacted profitability but described the move as prudent and supportive of asset quality over the medium term.

Ambit Capital maintained a ‘sell’ rating with a target price of Rs 713, citing structurally higher credit costs following tighter loss norms and increased competition from banks, which it said could delay recovery to a 20 percent return on equity.

Emkay Global Financial Services, which has a ‘reduce’ rating and a target price of Rs 950, said the spike in provisions was largely discretionary. It added that underlying business momentum remains intact, with improving bad loan trends and a steady profitability outlook.

The company reported a 6 per cent decline in consolidated net profit to Rs 4,066 crore for the third quarter of the current financial year. The company had reported a net profit of Rs 4,308 crore in the year-ago period.

Total income rose to Rs 21,215 crore for the third quarter of the ongoing fiscal year from Rs 18,058 crore in the year-ago period, Bajaj Finance said in a regulatory filing. The consolidated assets under management improved to Rs 4,88,477 crore at the end of December 2025 compared to Rs 3,98,043 crore in the third quarter of last year.

Net interest income grew to Rs 11,317 crore as against Rs 9,382 crore in the third quarter of FY25. With regard to asset quality, the gross non-performing assets (NPAs) of the company increased to 1.21 per cent from 1.12 per cent during the same period a year ago.

However, Net NPAs declined marginally to 0.47 per cent as compared to 0.48 per cent a year earlier. The company has a provisioning coverage ratio of 61 per cent as against 57 per cent on stage 3 assets as of December 31, 2024.

(With inputs from Reuters) 

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