Explore the journey of Bajaj Finance in 2025—strong earnings, a growing customer base, and rising credit risks. Discover why Bajaj Finance remains a dominant NBFC despite emerging asset quality concerns.
Bajaj Finance: From Modest Beginnings to Financial Giant
As one of the most reputable NBFCs in India, Bajaj Finance has established an exceptional reputation. Originally launched as Bajaj Auto Finance Limited on March 25, 1987, its initial focus was to finance two- and three-wheelers. However, since its stock market debut on April 1, 2003, Bajaj Finance has transitioned into a multifaceted financial institution with a robust nationwide presence.
The company’s listing on the Bombay Stock Exchange and the National Stock Exchange was a noteworthy milestone. From that moment, Bajaj Finance began expanding its portfolio across consumer durables, SME loans, commercial lending, and digital financing solutions.
Bajaj Finance’s Explosive Financial Evolution
The transformation of Bajaj Finance from a niche vehicle financier into a financial powerhouse is evident in its exponential asset growth. In 2006, the company had assets under management (AUM) worth only ₹1,000 crore. This outstanding growth demonstrates the business’s sustained momentum and leading position in the finance industry. This astronomical rise reflects the company’s strategic diversification and aggressive market positioning.
Share price growth has been equally spectacular. From trading below ₹100 in its early days, Bajaj Finance’s stock now trades above ₹9,000. In April 2025, the share price stood at ₹8,842.15, reflecting a 3.21% increase over its previous close. The stock’s 52-week high touched ₹9,258.95, while its low hovered around ₹6,376.55. Despite short-term volatility, Bajaj Finance gained 25.58% year-to-date in 2025, showcasing solid investor faith.
Strong Q1 FY26 Results Back Bajaj Finance’s Dominance
For Q1 FY26, company reported strong financials, reaffirming its leadership in India’s NBFC sector:
Net Profit: ₹4,700–₹4,765 crore, marking a 20%–22% YoY jump from ₹3,912 crore.
Revenue: Rose 21% YoY to ₹19,524 crore.
Net Interest Income (NII): Climbed 22% to ₹10,227 crore.
New Loans Disbursed: 13.49 million, a 23% YoY increase.
Customer Base: Reached 106.5 million, adding 4.7 million in Q1 alone.
Asset Quality Concerns Surface Amid Growth
Despite the strong numbers,
This finance company isn’t immune to headwinds. Asset quality has begun to show signs of stress:
Gross Non-Performing Asset (GNPA): grew from 0.86% YoY to 1.03%.
Net NPA: Rose to 0.5% from 0.38% YoY.
Provisions: Jumped 26% YoY to ₹2,120 crore.
Coverage Ratio on Stage 3 Assets: A healthy 52%.
This uptick in NPAs is largely due to rising delinquencies in MSME and vehicle loan portfolios. As a result, markets reacted negatively post-results, with Bajaj Finance stock dropping over 6% on July 25, 2025—its steepest single-day fall in over two years.
Cautious Outlook for MSME Lending
Management acknowledged a need for caution moving forward, especially in MSME and two-wheeler financing. Slowing demand and repayment pressures could lead to moderated growth in these segments.
However, the company remains confident in its digital lending model and diversified loan mix to navigate upcoming challenges. Bajaj Finance’s capital adequacy ratio (CRAR) stands strong at 21.96%, indicating financial stability and preparedness to absorb potential shocks.
Analyst Sentiment Remains Largely Bullish
Despite the emerging concerns, This Financial institution continues to attract positive sentiment among analysts:
Average Rating: “Strong Buy” to “Buy”
Breakdown: Only four analysts recommend a sell, while eleven give it a strong buy rating and twelve a buy rating.
Target Range for 2025: Most price targets fall between ₹7,185 and ₹7,450. A few bearish forecasts go as low as ₹640, but this is not the consensus.
The company still commands a premium valuation, with investors focusing on its long-term profitability, market leadership, and innovation-driven operations.
Final Thoughts: Bajaj Finance’s Road Ahead
In the Indian financial industry, Bajaj is still a standard. With a vast customer base, diversified product range, and tech-driven approach, the company has weathered multiple market cycles and emerged stronger each time.
However, the next few quarters may test its resilience. Rising credit costs, asset quality risks, and moderated MSME growth could impact short-term performance. Nonetheless, Bajaj’s legacy of adaptability, risk management, and consistent growth ensures its position as a top pick among India’s NBFC stocks.
For investors eyeing long-term value in India’s consumption and credit expansion story, Bajaj Finance still offers a compelling proposition, with a watchful eye on emerging risks.