Bajaj Finance has once again captured investor attention with a robust 22% year-on-year (YoY) surge in consolidated net profit for the second quarter of FY26, reaching ₹4,875 crore. Despite falling slightly short of market expectations pegged at ₹4,969 crore, the performance underscores the company’s resilience in a volatile lending environment. As shares remain in focus, market participants are evaluating whether to buy, sell, or hold the stock amid mixed analyst sentiment and evolving asset quality metrics.
Q2 FY26 Performance Highlights
- Net Profit: ₹4,875 crore, up 22% YoY from ₹4,000 crore
- Net Interest Income (NII): ₹10,785 crore, up 22% YoY
- Pre-Provisioning Operating Profit: ₹8,874 crore, up 21%
- New Loans Booked: 1.22 crore, up 26% YoY
- Customer Franchise: 11.06 crore, up from 9.55 crore YoY
- Gross NPA: Increased to 1.24% from 1.03% sequentially
Timeline of Key Events
| Date | Event |
|---|---|
| Nov 10, 2025 | Q2 FY26 results announced |
| Nov 11, 2025 | Stock in focus post earnings |
| Nov 12, 2025 | Analyst ratings updated |
| Nov 13, 2025 | Investor calls and media briefings |
| Nov 14, 2025 | Market reaction stabilizes |
Analyst Ratings and Market Sentiment
The earnings report has triggered a divergence in analyst opinions:
- Morgan Stanley: Maintains Overweight rating; revised target price citing long-term growth potential.
- Bernstein: Reiterates Underperform due to emerging stress in unsecured loan segments and rising credit costs.
- Motilal Oswal: Suggests Hold with a cautious outlook on asset quality.
- ICICI Securities: Recommends Buy for long-term investors, citing strong fundamentals and digital lending leadership.
Comparative Analysis of NBFC Peers
| Company | Q2 Net Profit YoY Growth | Gross NPA | Analyst Consensus |
|---|---|---|---|
| Bajaj Finance | 22% | 1.24% | Mixed |
| HDFC Ltd | 18% | 1.10% | Positive |
| Muthoot Finance | 12% | 2.30% | Neutral |
| Shriram Finance | 15% | 2.00% | Cautious |
Sectoral Outlook and Investment Strategy
The non-banking financial company (NBFC) sector is navigating a complex macroeconomic landscape marked by rising interest rates, inflationary pressures, and regulatory scrutiny. Bajaj Finance’s diversified loan book, strong digital infrastructure, and expanding customer base offer a cushion against cyclical headwinds.
However, the uptick in gross non-performing assets (NPAs) and credit costs has raised concerns about asset quality. Investors are advised to monitor:
- Loan mix trends, especially unsecured personal loans
- Provisioning coverage ratio
- Cost-to-income ratio
- Digital lending growth vs. risk exposure
Buy, Sell or Hold: What Should Investors Do?
Buy: Long-term investors with a high-risk appetite may consider accumulating the stock on dips, given Bajaj Finance’s strong brand, tech-driven scalability, and consistent earnings growth.
Hold: Those already invested may hold positions while closely tracking asset quality and regulatory developments. The company’s ability to manage credit risk will be key.
Sell: Short-term traders or conservative investors may consider partial profit booking, especially if the stock rallies beyond its fair valuation amid broader market volatility.
Financial Snapshot: Q2 FY26 vs Q2 FY25
| Metric | Q2 FY26 | Q2 FY25 | YoY Change |
|---|---|---|---|
| Net Profit | ₹4,875 crore | ₹4,000 crore | +22% |
| NII | ₹10,785 crore | ₹8,838 crore | +22% |
| Total Income | ₹13,170 crore | ₹10,946 crore | +20% |
| Loans Booked | 1.22 crore | 97 lakh | +26% |
| Customer Franchise | 11.06 crore | 9.55 crore | +16% |
Risks and Considerations
- Asset Quality Deterioration: Rising NPAs could impact profitability and investor sentiment.
- Regulatory Changes: RBI’s evolving stance on digital lending and NBFC norms may affect operations.
- Valuation Premium: Bajaj Finance trades at a premium compared to peers, making it sensitive to earnings misses.
Conclusion
Bajaj Finance’s Q2 performance reflects strong operational execution but also signals caution due to asset quality concerns. Investors must weigh the company’s growth trajectory against emerging risks before making portfolio decisions. The stock remains a bellwether in the NBFC space, and its movement will likely influence sectoral sentiment in the coming quarters.
Disclaimer: This article is based on publicly available financial data and analyst commentary. It does not constitute investment advice. Readers are encouraged to consult certified financial advisors before making trading or investment decisions.
