Bajaj Finance Ltd. will see its shares react to the quarterly business update on Friday, July 3. The update was disclosed after market closing hours on Thursday.
Analysts who are bullish on the stock believe that the update is a reflection of healthy core trends and also expect the company to report better margins going forward.
39 analysts have coverage on Bajaj Finance, of which 27 have a "buy" rating and six each have a "hold" and "sell" rating respectively.
Why Is Jefferies Bullish On Bajaj Finance?
Brokerage firm Jefferies maintained its "buy" rating on Bajaj Finance with a price target of ₹1,210, which indicates an upside potential of around 19% from current levels.
The note said that Bajaj Finance's update showed its Assets Under Management (AUM) grew at the fastest pace in four quarters and Jefferies expects that figure to be at 23% for the full year.
"This reflects healthy core trends and seasonally stronger demand for consumer durable loans," Jefferies wrote in its note, adding that a seasonal uptick in consumer durable loans may also help Net Interest Margins (NIMs) for Bajaj Finance ahead.
Jefferies is of the view that Bajaj Finance, along with NBFCs could benefit more from a strong deposit mobilization courtesy of the Reserve Bank of India's FCNR (B) norms.
Why Did JPMorgan Raise Its Bajaj Finance Target?
JPMorgan is also among those analysts who are "overweight" on the stock. It has also raised its price target to ₹1,215 from ₹1,175 earlier. The revised price target is the second-highest on the street for the company.
The brokerage wrote in its note that the first quarter update underscored strong growth momentum, new customer acquisition rising after two straight quarters of declines and that, according to JPMorgan, will assuage concerns that Bajaj Finance's customer acquisition story is slowing down.
"The Q1 growth print improves our confidence in Bajaj Finance's financial year 2027 AUM growth delivery at the higher end of its guided range, which we believe, poses upside risk to consensus forecast," the brokerage wrote.
Morgan Stanley also remains "overweight" on the stock with a price target of ₹1,120.
The brokerage said that the investor focus is likely to be on Net Interest Margins (NIMs) in the first quarter, pace of credit costs declines, and the overall outlook for financial year 2027, amidst the entire geopolitical situation.
How Was Bajaj Finance's Q1 Update?
Bajaj Finance saw a 20% growth in new loans booked for the June quarter, customer franchise increased by 5.1 million, while its AUM grew by nearly ₹37,000 crore from last year.
Shares of Bajaj Finance had ended 0.5% higher on Thursday at ₹1,020. The stock has recovered nearly 30% from its 52-week low of ₹787.9, which it fell to during the Iran war.