Bajaj Finance Shares Tumble 7% After Q2 Results — Guidance Cut Sparks Mixed Analyst Reactions
Mumbai, November 11, 2025 — Shares of Bajaj Finance Ltd., one of India’s largest and most trusted non-banking financial companies (NBFCs), witnessed a sharp decline of nearly 7% in early trade on Tuesday, a day after the company released its September quarter (Q2 FY25) results. The market’s reaction was largely driven by management’s decision to trim full-year growth guidance and signal elevated credit costs in the coming quarters.
Management Turns Cautious — Growth Guidance Trimmed
Bajaj Finance’s management struck a conservative tone in its latest quarterly update, reducing its FY25 Asset Under Management (AUM) growth outlook to 22–23%, compared to the earlier projection of 24–25%.
This revision comes amid slower-than-expected momentum in the mortgage and SME (Small and Medium Enterprise) lending verticals, two of the company’s key growth drivers. The management further indicated that SME loan growth is expected to moderate to around 10–12%, while the MSME (Micro, Small & Medium Enterprises) segment is likely to bottom out by Q1 FY26, suggesting a gradual recovery thereafter.
Higher Credit Costs and Unsecured Loan Tightening
To maintain asset quality and manage risks in a more uncertain credit environment, Bajaj Finance has taken a prudent approach by reducing its unsecured MSME loan volumes by nearly 25%.
The company also guided that credit costs — a measure of provisions made against potential loan losses — will remain on the higher end of the 1.85–1.95% range for FY25. However, the management expects some relief and gradual improvement from FY26 onwards, supported by tighter underwriting standards and stronger collection efforts.
Q2 FY25 — Financial Performance Snapshot
Despite these cautionary signals, Bajaj Finance’s Q2 results still reflect robust underlying business performance, underscoring the NBFC’s diversified portfolio and consistent profitability.
| Metric | Q2 FY25 | YoY Growth / Change |
|---|---|---|
| Net Interest Income (NII) | ₹10,785 crore | +22% YoY |
| Net Profit | ₹4,948 crore | +23.3% YoY |
| Gross NPA | 1.24% | Up from 1.03% (Q1 FY25) |
| Net NPA | 0.6% | Up from 0.5% (Q1 FY25) |
| Net Interest Margins (NIMs) | Flat YoY | — |
While the profit and income growth remain strong, the slight uptick in Gross and Net NPAs points to mild stress in certain borrower segments, especially when compared with peers like HDFC Bank and Kotak Mahindra Bank, which reported improved asset quality this quarter.
Analysts Remain Divided — Long-Term Story Intact
Brokerages offered mixed reactions to the results. Some analysts trimmed near-term earnings estimates, citing cautious management commentary and rising provisions, while others maintained their bullish long-term stance, pointing to Bajaj Finance’s strong digital infrastructure, brand strength, and cross-sell capabilities.
| Brokerage | Rating | Target Price | Key Takeaway |
|---|---|---|---|
| CLSA | Outperform | ₹1,200 | Long-term growth intact; short-term caution justified |
| Morgan Stanley | Overweight | ₹1,195 | EPS cut slightly; sees dip as entry opportunity |
| HSBC | Buy | ₹1,200 | Expects 28% EPS CAGR (FY26–28) on AUM recovery & efficiency |
| Jefferies | Buy | ₹1,270 | Projects 23% profit CAGR over FY25–28 |
| Bernstein | Underperform | ₹640 | Flags asset quality risks and margin compression |
Out of 37 analysts, 20 have a “Buy” rating, 12 suggest “Hold”, and five recommend “Sell.”
Market Reaction — Sharp Drop After Strong Rally
Following the Q2 announcement, Bajaj Finance’s stock opened at ₹1,015.9, marking a 6.4% fall from Monday’s close of ₹1,086.6. This comes after the stock had rallied nearly 1.9% on Monday, briefly nearing its 52-week high of ₹1,102.5.
Even after today’s correction, the stock remains up about 5% in the past month, reflecting continued investor faith in the company’s long-term growth potential.
