Bajaj Finance soars 8% after Q1: Buy, Hold, or Sell now? Brokerages split over valuation

The NBFC firm reported a 28% year-on-year jump in Q1FY27 net profit to Rs 6,080 crore. This was driven by factors such as healthy loan growth and lower credit costs.

But does the rally leave more room for gains? 

Brokerages are split on that count. While two brokerages continue to recommend ‘Buy’  on the stock, one has maintained a ‘Hold’ rating and another remains cautious with a ‘Reduce’ call. 

Here’s a look at what they are saying after the earnings –

Motilal Oswal turns bullish on Bajaj Finance after Q1

Among the biggest changes came from Motilal Oswal, which upgraded Bajaj Finance to a ‘Buy’ rating and raised its target price to Rs 1,300. This implies an upside potential of about 23% from the previous closing price.

According to the Motilal Oswal report, the company’s earnings outlook has strengthened because of three key factors. 

It said, “The credit cycle has turned, which will enable lower credit costs and higher earnings.” 

Motilal Oswal report also highlighted that “Multiple growth engines (core lending, digital ecosystem, gold loans, new businesses for BAF) are firing simultaneously.”

The brokerage further believes that the current earnings cycle still has room to improve. As per the brokerage report, it has increased its earnings estimates after factoring in faster growth in assets under management and lower credit costs.

It also noted, “BAF reported an all-round strong quarter, with healthy performance across growth, asset quality, credit costs and margins.”

Nomura stays positive on Bajaj Finance – Why?

Nomura has also retained its ‘Buy’ rating, although with a relatively lower target price of Rs 1,140. This indicates an upside potential of about 8% from the current market price.

Bajaj Finance delivered better-than-expected profit mainly because credit costs remained lower than anticipated. Nmoura also pointed out that the company reported one of the lowest increases in funding costs among the Non-Banking Financial Companies it tracks.

The brokerage said, “Overall, BAF’s 24% AUM growth was led by healthy growth momentum across product segments.” While there was some weakness in urban personal loans, stronger demand in gold loans, microfinance, commercial vehicles and tractor financing helped offset the slowdown.

Nomura added, “We continue to like Bajaj Finance among NBFCs and maintain our Buy rating.”

Nuvama says growth is healthy, but valuations remain expensive

However, all brokerages do not share the same enthusiasm. 

Nuvama has retained its ‘Hold’ rating while raising its target price to Rs 1,175. 

According to the Nuvama report, the company’s growth has picked up again and asset quality has remained stable. This should support healthy profitability over the next few years.

It said, “With growth re-accelerating and asset quality holding up well leading to lower credit cost, we reckon BAF shall deliver healthy RoA/RoE around 4.1%/20-21% over FY27-29 estimates.”

However, the brokerage believes valuations continue to be rich. As per the report, this limits further upside despite improving business performance.

Emkay remains cautious despite raising estimates

Emkay has maintained a ‘Reduce’ rating while increasing its target price by 5% to Rs 1,050 from Rs 1000.

The report noted that the June quarter performance and management commentary prompted it to raise its earnings estimates by around 3-4%. However, it believes the current market valuation already reflects much of the expected improvement.

The brokerage said, “Factoring in the Q1FY27 performance and management commentary, we adjust our FY27-29 estimates; this results in our EPS increasing 3-4%.”

Bajaj Finance stock performance so far 

Bajaj Finance share price was trading around 7% higher in the early trading session after the earnings announcement.

It has gained more than 12% in the past one month, around 24% in six months, nearly 27% over the past year, and about 15% so far in 2026.

The stock’s 52-week high stands at Rs 1,124, while the 52-week low is Rs 787.90. Bajaj Finance currently has a market capitalisation of about Rs 6.98 lakh crore and trades at a price-to-earnings ratio of 36.85.

Disclaimer: This article reviews third-party brokerage analyses, price targets, and ratings on Bajaj Finance following its Q1 results. The views, estimates, and recommendations expressed are strictly those of the respective brokerage firms and do not constitute financial advice or an offer/solicitation to buy or sell securities. Investors are strongly advised to conduct independent research and consult a SEBI-registered financial advisor before making any investment decisions. This disclaimer has been generated using AI to support user well-being and responsible content consumption.