Bajaj Finance Slides on Slower Loan Demand Amid Strong Q2
Bajaj Finance Slides on Slower Loan Demand Amid Strong Q2
Bajaj Finance and Bajaj Finserv shares drop as guidance points to slower loan demand, even as quarterly profits rise. Analysts weigh near-term risks and fair-value concerns.
Mumbai: Bajaj Finance and its parent Bajaj Finserv tumbled on Tuesday after the group signaled a slower pace of loan demand, even though the second-quarter results looked solid. Bajaj Finance fell about 7% to ₹1,009.10, while Bajaj Finserv slipped around 6% to ₹1,992.9, even as the broader market advanced with the Nifty up roughly 0.5%.
Analysts noted that the management commentary pointed to loan demand slowing by about 1-2% from the earlier 24-25% projection, a shift that can impact growth trajectories for both the lender and its holding company. The view that Bajaj Finance is closely tied to Bajaj Finserv means a slide in the former often drags the latter as well.
Emkay Global framed the move as a moderation in growth with intensified competition, suggesting the premium valuation multiple versus peers could narrow if growth continues to decelerate. Still, investors have seen substantial gains this year, with Bajaj Finance up around 45% and Bajaj Finserv up about 26% year-to-date, outpacing the Nifty’s roughly 8% gain.
Some market watchers argued that the stock may be nearing fair value, with one strategist noting that Bajaj Finance could see additional declines in the near term but that the negatives are largely priced in. A market desk summed up the sentiment by saying there are no major downsides expected in the near term unless forecasts deteriorate further.
On the profit side, Bajaj Finserv reported an 8% rise in Q2 net profit to ₹2,244 crore, underscoring strength in the company’s non-lending segments. However, the lending arm’s cautious outlook and higher credit costs tempered enthusiasm, and FY26 growth guidance for the AUM segment was trimmed to 22-23% from the 24-25% range. Bajaj Finserv’s overall results remain a reminder that what fuels the group’s earnings is increasingly a balancing act between solid profits and the risks inherent in lending growth.
In parallel, the market noted that the AUM growth outlook faced downward revisions, signaling tighter credit conditions ahead. Despite the caution, some investors welcomed the steady profits and the potential for a rebound if loan demand stabilizes and credit costs come down. In any case, the near-term path for Bajaj Finance and Bajaj Finserv will depend on how quickly the demand environment clears and how effectively the group can manage costs in a tightening credit cycle.
Cover image source: Bajaj Finance share price crashes 7%; JM Financial raises target; here’s why 🔗
