Bajaj Finance shares jump over 3%, top Nifty 50 gains after Citi upgrade, targets raised

Brokerage firm Citi has upgraded its recommendation on Bajaj Finance to "buy" from its earlier rating of "neutral" in its note on Thursday, April 30, in response to its fourth quarter results that were reported after market hours on Wednesday.

Citi has also raised its price target on Bajaj Finance to ₹1,120 from ₹1,090 earlier. The revised price target implies an upside potential of 20% from Wednesday's closing levels.

The brokerage cited two key headwinds that constrained the Assets Under Management (AUM) growth in financial year 2026 to 22%, which were MSME stress and a captive rundown in the two and three-wheeler segments. Both of these are now firmly in the rearview, according to Citi's note.

CLSA has an "outperform" rating on Bajaj Finance with a price target of ₹1,200, stating that the management tone on the earnings call sounded positive with a reiteration of its credit cost guidance of 1.45% to 1.6% for the new financial year.

Jefferies has a "buy" rating on Bajaj Finance with a price target of ₹1,210 per share, which is the second-highest target for the stock on the street.

Despite the macro challenges, the management sees AUM growth between 22% to 24% and a decline in credit costs as well.

As a result, Jefferies expects Bajaj Finance's profit over the next three years to grow at a Compounded Annual Growth Rate (CAGR) of 20%.

Bajaj Finance's asset quality improved during the quarter on a sequential basis and the management said that it will remain below the guided level going forward as well.

The management said that the new financial year has begun well with robust loan volumes, and that the MSME business should recover from the second half of financial year 2027 after a risk-led moderation previously.

Gold Loans are seen as a major growth driver for Bajaj Finance with the contribution likely to rise to 5% of AUM from 3.5% earlier.

JPMorgan remains "overweight" on Bajaj Finance with a price target of ₹1,080 stating that positive trends highlighted by Bajaj Finance across growth and asset quality is something that stood out for them.

"While a lagged impact of the conflict cannot be ruled out, April is trending better than our earlier expectations," JPMorgan's note said, adding that a combination of healthy loan growth, operating cost leverage from AI initiatives and a decline in credit costs should support a 26% earnings CAGR over financial year 2026-2028.

38 analysts have coverage on Bajaj Finance, of which 27 have a "buy" rating, five say "hold" and six have a "sell" rating.

Shares of Bajaj Finance ended 1% higher on Wednesday before the results announcement at ₹932.8. The stock has risen 14% in the last one month.