Bajaj Finance shares jump 3% after UBS upgrades to Neutral, hikes target price while Jefferies screams Buy

Shares of Bajaj Finance jumped around 3% on Wednesday as brokerages issued bullish calls for the stock, boosting investor sentiment after a 6% decline in one month.

Bajaj Finance shares surged to Rs 1,038.60 apiece, rising over 3% in a week. The stock is currently leading gains on benchmark indices Sensex and Nifty, which are trading with minor gains. Bajaj Finserv, meanwhile, is also up over 2%.

Jefferies on Bajaj Finance share price

Jefferies hosted Bajaj Finance MD Rajeev Jain and other executives for a roadshow, following which it reaffirmed its Buy call and said the stock remains among its top picks. The international brokerage has fixed a target price of Rs 1,280 apiece for the shares of the company, implying around 27% upside potential from the previous closing price of Rs 1,009 apiece.


The international brokerage noted that Bajaj Finance management is confident about short-term and long-term growth and profitability. In the short term, strong demand, asset quality, and efficiencies will make up for slightly lower net interest margins (NIM), and management will use tailwinds to build resilience, it added.

Over the next 10 years, Bajaj Finance management plans to grow AUM at a 23% CAGR and profits faster, Jefferies said, adding that AI gets high attention from management and the board. It noted that succession will be an internal selection, with the announcement likely in January or February of 2028.

UBS on Bajaj Finance share price

UBS upgraded its rating for shares of Bajaj Finance to Neutral from Sell, and increased its target price to Rs 1,100 apiece from Rs 910 apiece. The latest target price implies more than 9% upside potential from the stock's previous closing price.

We believe India is entering a strong unsecured credit growth cycle, led by personal loans. We think this is being supported by healthy asset quality across banks and NBFCs, flat unsecured household leverage over the past three years, abundant system liquidity and a more risk-on stance from lenders, UBS said in its latest note.

The international brokerage believes Bajaj Finance has cleared its asset quality issues across unsecured products, while an increased provision coverage ratio acts as a cushion against macro headwinds. This could provide a cyclical push toward higher-yielding loan growth in the near term, driving cyclical earnings acceleration. We think the company's EPS downgrades have largely passed and foresee strong EPS growth of 30%+ in FY27, although it may slow to the high teens in FY28. Bajaj Finance is trading at nearly 23x one-year-forward PE, capturing most of its upside potential and leaving us at Neutral, it added.

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Disclaimer: This article has been written by Debaroti Adhikary, who is not a SEBI-registered Research Analyst or an Investment Adviser. Debaroti Adhikary and his/her ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here.