Bajaj Finance shares rise 8% in February after falling for 3 consecutive months— Should you buy or book profits?

Bajaj Finance share price has been enjoying healthy buying interest of late, driven by in-line December quarter numbers and an overall improvement in domestic market sentiment.

Bajaj Finance shares have gained about 8% in February so far after suffering losses for the last three consecutive months. Over the last one year, the stock has risen over 21%, hitting a 52-week high of ₹1,102.45 on October 23 and a 52-week low of ₹802.72 on February 12 last year.

On June 16 last year, the stock underwent a 1:2 stock split. On the same day, the company also offered a bonus issue, rewarding shareholders with four additional shares for every one share held.

With the stock delivering strong gains in the short term, speculation has grown over whether investors should buy at current levels or consider booking profits.

Time to buy or book profits?

Bajaj Finance's consolidated net profit declined by 5.6% YoY to ₹4,066 crore in Q3FY26, impacted by higher provisions, including an accelerated ECL charge of ₹1,406 crore and a one-time gratuity-related expense of ₹265 crore due to the new labour codes.

However, net interest income (NII) rose by nearly 21% to ₹11,318 crore in Q3.

Brokerage firm PL Capital maintained a 'buy' rating on the stock, with a target price of ₹1,125, after the Q3 results.

PL Capital expects FY26 NIM to remain stable, aided by a lower cost of borrowing.

"We build a higher credit cost of 2.2% for FY26E due to accelerated provisions in 9MFY26. Post that, we expect a moderation to 1.8%/ 1.7% in FY27/ FY28E, as the stress in MSME subsides and the share of captive 2W/3W in the portfolio runs down," said PL Capital.

BNP Paribas India keeps Bajaj Finance among its top NBFC picks, with a target price of ₹1,250, as it does not foresee a material erosion in the earnings power of its healthy 6% pretax ROA.

"Trading at nearly 25 times FY27E P/E, Bajaj Finance remains our top NBFC pick. We see our view changing only if our opinions on the growth runway or the company’s ability to execute changes, and not on segment cyclicality. As credit costs normalise and margins improve, with a drop in borrowing costs, FY27E EPS growth supports our outperform rating," said BNP Paribas.

What Bajaj Finance tech chart indicate?

According to Jigar S. Patel, Senior Manager of Equity Technical Research at Anand Rathi Share and Stock Brokers, after a brief phase of consolidation, Bajaj Finance has given a breakout above the 50 DEMA on the daily chart, indicating a potential resumption of upward momentum.

Additionally, the RSI has broken out of its falling trendline, signalling strengthening bullish momentum.

"Based on the current setup, one may consider buying above ₹988 on a closing basis, with a target of ₹1,040 and a stop loss at ₹970," said Patel.

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Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.