Bajaj Finance Share Price Target Raised to Rs 1,000: What It Means for Investors After Strong Q1 Show

In a fresh update, brokerage Emkay Global has reiterated its ‘ADD’ rating on Bajaj Finance and raised its share price target to ₹1,000 from the earlier ₹925, citing a satisfactory Q1FY26 performance and improving fundamentals. The revised target implies a standalone FY27E P/B of 5x.

According to Emkay, “BAF reported an overall satisfactory quarter, with PAT coming 3% above consensus/our estimates. This was primarily due to lower-than-expected credit cost, which came in at 1.98%, around 10bps lower than our estimate.”

Credit Costs Contained, Margins Set to Improve
The company's credit cost remained elevated at 2.02% on AUF, but still undercut expectations, aiding a surprise beat on profit. Emkay believes credit cost will remain at current levels in the near term and improve from Q3FY26 onwards, supported by tighter risk management and early delinquency monitoring. The firm estimates credit cost will fall to 1.85–1.95% on AUF.
Margins were marginally impacted due to differences in accounting treatment between mutual fund and treasury investments, which the management said will normalize soon. With the RBI’s recent rate cut, the cost of funds (CoFs) has already moderated by 20bps, and further easing is expected as liabilities are repriced.

“The management remains confident of seeing a further ~5-10bps expansion on account of a rate cut by end-FY26,” Emkay noted in the report.

Growth Guidance Maintained Despite MSME, Auto Stress
Despite signs of elevated stress in the MSME and Auto segments, Bajaj Finance has maintained its 23-24% growth guidance. The company is actively winding down its captive auto book and has restructured ₹2.19 billion in MSME loans, with an additional ₹1 billion in scope, primarily for business purposes.

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“To manage risk in the MSME book... it expects healthy recoveries as such loans were primarily for business purposes,” Emkay highlighted.
Meanwhile, other loan segments such as gold loans continue to perform well.

Bajaj Finance Share Price Target

“Factoring in the management commentary and Q1FY26 results… we maintain ADD on the stock, while revising our Jun-26E TP upward by ~8% to ₹1,000,” the report said.
Factoring in the Q1 results and management outlook, Emkay has slightly adjusted its FY26 AUM growth estimate downward by ~1%. However, it has revised its EPS estimate upward by 1–3% for FY26–28, driven by margin improvement. This results in a 10–15bps increase in RoA.

 

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