Bajaj Finance shares took a hit on Wednesday, April 30, 2025, dropping 6% following the company’s announcement of its Q4 results and revised guidance for the upcoming financial year. The stock, which had been trading higher earlier in the day, fell as much as 5.8% on the Bombay Stock Exchange (BSE), reaching an intraday low of ₹8,560 per share. As of 9:55 AM, the shares were priced at ₹8,668, down 4.6% compared to the benchmark BSE Sensex, which saw a slight increase of 0.15%.
Investors reacted negatively to the company’s announcement of more modest growth projections for FY26, which led to the sharp decline in the stock price.
Why Bajaj Finance Shares Dropped
The decline in Bajaj Finance’s stock came after the company revised its asset under management (AUM) and return on equity (RoE) guidance for the upcoming financial year. The company had initially projected a higher AUM growth rate of 25-27% for FY26, but this was lowered to 24-25%. Similarly, the RoE guidance was also reduced from 21-23% to 19-20%. This revision disappointed investors, who had hoped for more optimistic forecasts.
Analysts pointed out that despite a steady margin outlook and a decrease in projected credit costs, the company’s growth slowdown was concerning. “Moderation in growth guidance was a major negative from Bajaj Finance’s Q4 results,” said analysts at JM Financial Institutional Securities. “Though we like BAF for its ability to navigate across cycles, the revised growth guidance makes the stock’s current valuation look rich and provide limited upside in the near-term.”
Analysts’ Take on Bajaj Finance’s Future
Despite the disappointing guidance, some analysts believe the company’s fundamentals remain solid. Motilal Oswal Financial Services, for example, emphasized that Bajaj Finance’s credit costs have likely peaked, and the company is well-positioned to manage future challenges. The brokerage maintained its “Neutral” rating on the stock with a target price of ₹10,000, based on 4.5-times the estimated book value per share for March 2027.
However, the analysts also noted that the stock is currently trading at relatively high valuations, which could limit its upside potential in the near term. “We estimate a compound annual growth rate (CAGR) of around 25% each for AUM and profit after tax (PAT) over FY25-FY27,” they added. “We expect Bajaj Finance to deliver a return on assets (RoA) of 4.1% and an RoE of 21% in FY27.”
Bajaj Finance’s Performance in Q4
Bajaj Finance reported a solid performance for Q4FY25, with a net profit of ₹4,546 crore, reflecting a 19% year-on-year (YoY) increase and a 6% quarter-on-quarter (QoQ) rise. The company’s net interest income (NII) also grew by 22% YoY, reaching ₹9,807 crore, although its net interest margin (NIM) contracted slightly by 10 basis points to 9.6%.
The company continued to expand its customer base, with its total customer franchise increasing to 101.8 million, marking a 22% YoY growth and a 5% QoQ increase. Bajaj Finance also saw a rise in new loan bookings, up 23% YoY to 10.7 million loans. Its total AUM rose 26% YoY to ₹4.17 trillion, despite the lower growth expectations for FY26.
Additionally, Bajaj Finance announced a stock split in a 1:1 ratio and a bonus issue in a 4:1 ratio, which may help make the stock more accessible to a broader range of investors.
Analysts’ Earnings Estimates
Analysts at Kotak Institutional Equities have slightly increased their earnings estimates for Bajaj Finance, raising projections by 1.6-3.4% for FY26 and FY27. These adjustments reflect the company’s slightly higher loan growth forecast and a reduction in expenses. Kotak has maintained an “Add” rating with a target price of ₹9,500 for the stock.
On the other hand, Emkay Global Financial Services has lowered its earnings estimates by 2-3%, citing expected declines in NIM and fee income. Despite this, Emkay also maintains an “Add” rating with a target price of ₹9,200.
What’s Next for Bajaj Finance?
The outlook for Bajaj Finance appears mixed, with some analysts remaining cautiously optimistic about the company’s long-term prospects. However, with lower growth guidance and high valuations, the stock may struggle to see significant upward movement in the short term.
Investors are advised to closely monitor the company’s performance over the next few quarters to determine whether Bajaj Finance can meet its revised growth targets. While the company has shown resilience in the past, the current challenges could dampen its ability to achieve the robust growth rates it has delivered in recent years.
