Shares of Bajaj Finance, a top non-bank lender in India, tumbled up to 7 percent on Tuesday, November 11, 2025, after the company trimmed its growth outlook for assets under management. This drop came right after the release of its September quarter earnings, which showed strong profits but raised concerns over slower expansion and rising credit costs.
Investors reacted sharply to the news, pushing the stock price down to around 1,008 rupees in early trading on the Bombay Stock Exchange. The company cited challenges in key segments like mortgages and small business loans as the main reasons for the revision, sparking a wave of market analysis and mixed sentiments.
Stock Reaction and Market Impact
The sharp decline wiped out billions in market value for Bajaj Finance, with shares closing the gap from a previous high. Trading volume spiked as investors digested the earnings report released after hours on Monday.
This move dragged down related stocks too, including those of parent company Bajaj Finserv, which fell over 6 percent ahead of its own results. Broader market indices like the Sensex and Nifty also felt the pressure, slipping amid foreign investor outflows and global economic worries.
Analysts point out that such drops are common after guidance cuts, but they often present buying opportunities for long-term holders. The stock has been volatile this year, influenced by tight liquidity and regulatory changes in the lending sector.
In recent months, similar events hit other lenders, like when a major bank revised its forecasts last quarter, leading to a brief sell-off followed by recovery.
Key Reasons Behind the Guidance Cut
Bajaj Finance lowered its assets under management growth target to 22 to 23 percent for the fiscal year, down from an earlier 24 to 25 percent. Management blamed this on slower progress in mortgages and small and medium enterprise loans.
They now expect small business growth to hover between 10 and 12 percent, with unsecured volumes cut by 25 percent due to higher risks. Credit costs are set to hit the upper end of the 1.85 to 1.95 percent range, with improvements not expected until next year.
Rising non-performing assets added to the concerns, with gross NPAs climbing to 1.24 percent from 1.03 percent in the prior quarter. Net NPAs edged up to 0.6 percent, signaling stress in consumer lending amid high inflation and over-leveraged borrowers.
The company has taken steps like tightening loan approvals and focusing on secured assets to mitigate these issues. This mirrors broader trends in India’s financial sector, where post-pandemic recovery has slowed due to economic headwinds.
Financial Performance Highlights
Despite the guidance setback, the quarterly numbers painted a picture of resilience. Net interest income rose 22 percent year-over-year to 10,785 crore rupees, driven by steady loan disbursals.
Net profit jumped 23.3 percent to 4,948 crore rupees, beating some expectations on cost controls and fee income. Assets under management grew 24 percent annually, showing the company still expanded robustly in the quarter.
Net interest margins held steady, providing some stability amid rising funding costs. The firm booked more new loans, up significantly from last year, in areas like consumer finance.
Here are some key metrics from the report:
- Assets Under Management: Up 24 percent year-on-year.
- New Loans Booked: Increased by a strong margin, supporting revenue.
- Credit Costs: Elevated but within guided range for now.
- Return on Assets: Maintained at healthy levels despite pressures.
To put this in context, compare the latest figures with previous quarters in this simple table:
| Metric | Q2 FY26 | Q1 FY26 | Q2 FY25 |
|---|---|---|---|
| Net Profit (crore) | 4,948 | 4,014 | 4,014 |
| Net Interest Income (crore) | 10,785 | 9,000 | 8,843 |
| Gross NPA (%) | 1.24 | 1.03 | 0.90 |
| AUM Growth (%) | 24 | 25 | 26 |
These figures highlight ongoing growth but emerging asset quality strains.
Analyst Views and Optimism
While the stock dipped, many analysts kept a positive outlook. Firms like CLSA stuck with an outperform rating and a target price of 1,200 rupees, citing the company’s strong market position.
Morgan Stanley noted the guidance cut might disappoint short-term, but they see it as a chance to buy on weakness. They maintain an overweight call with a 1,195 rupee target, trimming earnings estimates slightly.
Other brokerages echoed this, pointing to Bajaj Finance’s track record of bouncing back from similar hurdles. They expect credit costs to ease by next fiscal year, boosted by economic recovery and potential rate cuts.
A few voices were cautious, downgrading targets due to rising NPAs and slower growth. Overall, the consensus leans toward optimism, with most recommending buys for investors with a longer horizon.
This balanced view comes amid India’s booming fintech scene, where lenders like Bajaj Finance lead in digital lending innovations.
What Lies Ahead for Bajaj Finance
Looking forward, the company plans to focus on high-quality loans and digital expansion to counter current challenges. Management hinted at gradual improvements in asset quality starting next year.
Market watchers will keep an eye on upcoming quarters, especially with potential regulatory shifts and economic data releases. If inflation cools and consumer spending picks up, Bajaj Finance could regain momentum quickly.
Investors should watch for updates on credit trends and any strategic shifts. The firm’s diverse portfolio, including insurance and payments, adds layers of resilience.
In the bigger picture, this event ties into global trends where lenders adjust to post-recovery realities, much like recent adjustments by international banks facing similar pressures.
What do you think about Bajaj Finance’s prospects? Share your thoughts in the comments below and spread the word if this analysis helped you understand the market moves.
