Shares of Bajaj Finance Ltd plunged nearly 8% on Tuesday as investors reacted sharply to the company’s September quarter results and its trimmed growth outlook. The stock, which extended its morning losses, was down 7.55% at ₹1,003.40 on the BSE by 12:23 pm, making it one of the day’s biggest losers on Dalal Street.
The decline came despite Bajaj Finance reporting strong earnings on paper. Its profit after tax (PAT) rose 22% year-on-year to ₹4,875 crore, while net interest income (NII) jumped 22% to ₹10,785 crore. Net total income increased 20% to ₹13,170 crore, and pre-provision operating profit (PPOP) was up 21% at ₹8,874 crore. However, investors were spooked by the company’s revised growth guidance and rising credit costs, which overshadowed the positive headline numbers.
In its management commentary, Bajaj Finance lowered its FY26 assets under management (AUM) growth forecast to 22–23% from the earlier 24–25%. The company cited growing stress in its MSME, two-wheeler, and three-wheeler loan segments as the main reason for the downgrade. Management also warned that credit costs could remain elevated through the rest of the fiscal year, suggesting limited room for margin expansion.
Concerns about asset quality have deepened. The company’s gross NPA rose to 1.24% from 1.06% a year earlier, while net NPA increased to 0.60% from 0.46%. Loan losses and provisions climbed 19% year-on-year to ₹2,269 crore, pushing annualised credit costs to 2.05% of average assets. Analysts said the combination of higher provisioning and cautious guidance has heightened fears of a near-term slowdown in key retail lending verticals.
Despite its operational strength, Bajaj Finance’s valuation premium has come under strain. The stock currently trades at around five times FY27 estimated book value and 26 times FY27 earnings, leaving little margin for disappointment. In an environment where investors are rotating away from expensive financials, even a modest growth downgrade has triggered an aggressive sell-off.
Brokerages remain split on the outlook. Morgan Stanley and Jefferies maintained their positive stance, calling the correction a potential long-term buying opportunity for investors with patience. However, Motilal Oswal and JM Financial adopted a more cautious tone, warning of subdued near-term performance due to rising credit stress and slowing AUM growth.
For now, Bajaj Finance’s steep decline signals a clear shift in investor sentiment — from the unshakeable confidence that once surrounded the stock to a more measured, watchful approach. The company’s performance over the next few quarters will determine whether this is a short-lived setback or the beginning of a slower growth phase for India’s most admired non-banking finance company.
