ICICI Securities keeps Bajaj Finance at Buy with Rs 1,250 target

what happened

Analysts at ICICI Securities, whose report was published by Moneycontrol, say Bajaj Finance grew its assets under management (AUM) by 26.5% year on year in the second quarter of FY27. Following that, management lifted its FY27 AUM growth guidance to 26-27%, up from the earlier 22-24%.

Portfolio quality also improved. The company expects credit costs to stabilise at about 1.3% in the second half of FY27, below its earlier range of 1.45-1.6%. It plans to cut the share of customers holding more than three loans to 3.5% by March 2027, from roughly 7% now. Management remains cautious about rural, consumer, personal loan and microfinance segments.

The Buy rating is unchanged, and the target price of Rs 1,250 stays the same. The standalone business is valued at 5x FY28E price-to-book, while the housing subsidiary adds Rs 114 per share after a 20% holding company discount.

why it matters

Two signals matter for the market: lending is growing faster than expected, and the report sees asset quality risks easing. The backdrop is still demanding, with elevated oil prices, El Niño concerns and a rising rate cycle all pressuring non-bank lenders.

market impact

Bajaj Finance and India's non-bank lenders: strong growth and portfolio quality support sector valuations

tags

instruments