Bajaj Finance stock: Broker flags margin pressure despite growth
Published on 11/02/2026 at 15:32 | Editorial responsibility: Rafael Müller, Editor-in-Chief AD HOC NEWSGrowth faces margin pressure
- Bajaj Finance expanded assets under management strongly in the second quarter, led by mortgages and consumer lending.
- Higher funding costs are weighing on net interest margins, while asset quality requires close monitoring in gold loans and MSME lending.
- The planned INR 17,500 crore capital raise remains a key balance-sheet and growth consideration for investors.
Bajaj Finance stock remains supported by strong asset growth, but rising funding costs are putting pressure on profitability. In an analysis published on October 20, 2026, DSIJ reported that Prabhudas Lilladher retained its BUY recommendation while highlighting margin risks and portfolio-quality indicators.
The broker's assessment is summarized by DSIJ. Prabhudas Lilladher maintained a target price of INR 1,150 and retained its long-term valuation framework, while reducing its FY27E, FY28E and FY29E profit estimates by 1.1 percent, 1.3 percent and 2.1 percent respectively.
Growth remains broad-based
Bajaj Finance's assets under management rose 26.5 percent year on year and 6.9 percent sequentially to INR 5.8462 trillion in the second quarter of fiscal 2027. Mortgages, Urban Sales Finance, Urban B2C and Rural B2C led expansion, while MSME growth was limited to 3 percent amid portfolio pruning and elevated delinquencies.
Management expects fiscal 2027 loan growth of 26 to 27 percent and medium-term growth of 23 to 25 percent. The outlook depends on deeper customer penetration, wider distribution and the company's FINAI-led lending initiatives.
Funding costs test profitability
Net interest income increased 23.6 percent year on year to INR 13,334.7 crore, while profit after tax rose 28.6 percent to INR 6,366.6 crore. Calculated net interest margin declined to 9.5 percent from 9.6 percent in the previous quarter as yields moderated and funding costs increased.
Asset quality also weakened sequentially. Gross non-performing assets rose to 1.06 percent from 0.96 percent, while net non-performing assets increased to 0.42 percent from 0.39 percent. Gold-loan performance and MSME delinquencies are therefore key indicators for the next quarters.
Capital raise remains a monitorable
The board-approved capital raise comprises a potential INR 11,700 crore qualified institutional placement and a preferential issue of warrants worth up to INR 5,800 crore. DSIJ said the proceeds are intended to support growth and strengthen balance-sheet resilience. For shareholders, the plan also keeps potential dilution and the cost of future funding in focus.
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More news and analyses on Bajaj Finance stock are available in the topic overview.
Bajaj Finance at a glance
- Company: Bajaj Finance Limited
- ISIN: INE296A01024
- Sector: Finance
- Analysis date: October 20, 2026
- Broker: Prabhudas Lilladher
