Bajaj Finance share price jumps around 7% to record high on strong Q1 results FY27: Should you buy, sell or hold?

Bajaj Finance Q1 Review: Shares of Bajaj Finance jumped around 7% on Friday, 31 July, after the NBFC posted strong results for the quarter ended June 2026 (Q1FY27).

The stock rose as much as 6.8% to its record high of ₹1,128 per share on BSE.

The NBFC stock has risen 12% in the last 1 month, 20% in 3 months, 21% in 6 months and around 27% in the last 1 year. Hitting its all-time high today, the stock is now up 43% from its 52-week low of ₹788.40, hit in March 2026.

Bajaj Finance Q1 Results 2026

Bajaj Finance reported healthy growth in earnings and lending income for the April-June quarter (Q1 FY27), supported by continued expansion in its loan book and an improvement in asset quality.

The NBFC posted a 27.4% YoY increase in consolidated net profit to ₹5,986 crore in the June quarter, compared with ₹4,699 crore in the corresponding period last year. Net interest income (NII) also grew 23% YoY to ₹12,571 crore, up from ₹10,288 crore a year ago.

The company's asset quality improved during the quarter, with the gross non-performing asset (GNPA) ratio declining to 0.96% from 1.03% in the March quarter. The net NPA (NNPA) ratio also eased to 0.39%, compared with 0.50% in the year-ago quarter.

Bajaj Finance continued to expand its lending franchise, with assets under management (AUM) rising 24% YoY to ₹5.46 lakh crore from ₹4.41 lakh crore. The growth was primarily driven by the company's gold loan portfolio and commercial vehicle (CV) and tractor financing businesses.

In its stock exchange filing, the company said the Q1 FY27 provisions included a prudent management and macroeconomic provision of ₹296 crore. Excluding this one-time buffer, loan losses and provisions stood at ₹1,681 crore, marking a 13% decline compared with Q1 FY26.

Should you buy?

Brokerage house Motilal Oswal has upgraded the stock to buy with a target price of ₹1,300, indicating an upside potential of 23%.

As per the brokerage, BAF reported an all-round strong quarter, with healthy performance across growth, asset quality, credit costs and margins. Borrowing costs remained stable despite a volatile macroeconomic environment. Growth remained broad-based across segments, while asset quality continued to improve, supported by strong vintage performance and lower credit costs.

"BAF trades at 3.9x FY28E P/BV and ~20x P/E. We model a PAT CAGR of ~30% over FY26-FY28E and RoA/RoE of 4.2%/21% in FY28E. We believe the company is entering a phase of sustainable earnings compounding, driven by broad-based growth, resilient profitability and improving asset quality. We upgrade our rating on BAF to BUY with a TP of INR1,300 (premised on 4.8x FY28E BVPS)," it added.

HDFC Securities maintained its 'Buy' rating on the stock with an unchanged target price of ₹1,100, implying 4.3x March 2028 ABVPS and 22x FY28E EPS. The brokerage said Bajaj Finance delivered a healthy operating performance in the June quarter, with improvement in asset quality supporting an earnings beat.

"Despite increasing scale with assets under management of around ₹5.5 lakh crore, Bajaj Finance remains well placed to deliver healthy loan growth of around 23% CAGR and return on equity of nearly 20-21%, supported by robust customer acquisition, cross-selling capabilities, digital initiatives including FINAI, and continued focus on asset quality," HDFC Securities said.

The brokerage noted that asset quality staged a healthy turnaround, with credit costs at 1.51%, in line with management guidance, while delinquency trends continued to improve, leaving room for further gains. HDFC Securities believes the company's strong customer acquisition and cross-selling engine, along with continued process optimisation through digital initiatives, should support sustained growth in loans and profitability. However, it added that the current valuation of 4.1x March 2028 ABVPS limits near-term upside.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.