Business

Bajaj Finance shares climbed to around Rs 993 in early trade, snapping a four-session losing streak. The stock's sharp recovery came after the company reported a 26.5 per cent year-on-year increase in assets under management, or AUM, to nearly Rs 5.85 lakh crore as of September 30, 2026. The company had reported AUM of around Rs 4.62 lakh crore in the corresponding quarter last year.

The latest numbers suggest that Bajaj Finance continues to maintain strong growth momentum despite challenging conditions in the broader financial and equity markets. The company's AUM increased by nearly Rs 37,800 crore during the July to September quarter compared with the year-ago period, highlighting the continued expansion of its lending franchise.

Another important indicator was the growth in the company's customer base. Bajaj Finance's customer franchise reached 12.89 crore by the end of September, compared with 11.1 crore a year earlier. The company added more than 44 lakh customers during the second quarter, reflecting continued demand for its financial products across different segments.

The number of new loans booked also increased during the quarter. Bajaj Finance booked around 1.345 crore new loans in Q2 FY27, compared with 1.217 crore in the same quarter of the previous financial year, representing year-on-year growth of around 11 per cent.

However, the company pointed out that the new loan figures should not be directly compared with the previous year's numbers because the festive season arrived earlier last year, creating a stronger base for comparison. This seasonal factor partly explains why the growth in new loans was lower than the pace seen in some earlier quarters.

The company's deposit base also remained strong. Deposits stood at around Rs 69,750 crore at the end of the September quarter. The figures released by Bajaj Finance are provisional and subject to audit, with the company expected to announce its final second-quarter financial results later.

The strong business update has received a positive response from major brokerages. Jefferies has retained its Buy rating on Bajaj Finance and maintained a target price of Rs 1,280 per share. Based on the stock's prevailing market price, this target represents potential upside of around 35 per cent. Jefferies has also reaffirmed Bajaj Finance as one of its top picks.

Jefferies highlighted the company's 26 per cent year-on-year AUM growth as a particularly strong factor. According to the brokerage, this represents the highest AUM growth recorded by Bajaj Finance in seven quarters. Although growth in new loans slowed to 11 per cent, Jefferies attributed part of the moderation to the unusually strong base created by the early festive season last year.

Other brokerages have also remained positive on the stock. Citi has maintained a Buy rating with a target price of Rs 1,300 and pointed to AUM growth that is comfortably exceeding the company's guided range. The brokerage also believes that Bajaj Finance could potentially raise its FY27 growth guidance if the current momentum continues.

JPMorgan has maintained an Overweight rating and raised its target price to Rs 1,310 from Rs 1,295. The brokerage believes the strong second-quarter performance could support further upgrades to management guidance, while customer acquisition trends and net interest margin performance are expected to remain important factors for investors.

HSBC has also retained its Buy recommendation with a target price of Rs 1,270. The brokerage has viewed the company's proposed capital raise positively, although it has noted that the additional equity could result in some dilution in earnings per share and return on equity in the near term. At the same time, HSBC believes the company's strong AUM growth could help offset the impact over the medium term.

The capital-raising plan is another major development surrounding Bajaj Finance. The company has received approval to raise up to Rs 17,500 crore through a combination of a qualified institutional placement and a preferential issue of warrants to promoter Bajaj Finserv.

Under the proposal, Bajaj Finance plans to raise around Rs 11,700 crore through the QIP route, while another Rs 5,800 crore is expected to come through warrants issued to Bajaj Finserv. The fundraise is aimed at supporting the company's next phase of growth and strengthening its capital base.

The proposed capital raise would be the first equity fundraise by Bajaj Finance since November 2023, when the company raised around Rs 10,000 crore through a similar combination of QIP and preferential warrants.

The stock's recent performance also puts Monday's rally into perspective. Bajaj Finance shares had fallen more than 6 per cent over the previous month before Monday's recovery. Despite the recent volatility, the stock remained slightly positive for 2026 and continued to outperform the broader Nifty 50, which has faced significant pressure during the year. Over a three-year period, Bajaj Finance shares have delivered returns of more than 26 per cent, while five-year returns have been around 29 per cent.

From a technical perspective, analysts are also watching important support and resistance levels. Bajaj Finance had corrected nearly 20 per cent from its recent high before finding support around the Rs 936 level, which corresponds with the 61.8 per cent Fibonacci retracement level. The stock's recovery from that zone has strengthened the short-term picture, although a sustained move above Rs 1,020 would be important for a stronger technical turnaround.

Analysts have identified Rs 936 as an important support level and around Rs 1,020 as a key resistance zone. As long as the stock remains below the downward-sloping trendline near Rs 1,020, the broader technical trend could remain under pressure. Traders are therefore likely to keep a close watch on the Rs 936 to Rs 1,020 range.

For investors, the latest Q2 update presents a largely positive fundamental picture. Strong AUM growth, continued customer additions, higher loan bookings and a sizeable deposit base indicate that Bajaj Finance continues to expand at a healthy pace. The proposed Rs 17,500 crore capital raise could further support growth and provide additional financial flexibility.

The same time, investors will be watching the final Q2 financial results closely for more clarity on net interest margins, asset quality, profitability, credit costs and return ratios. These factors will determine whether the strong operational performance translates into equally strong earnings growth.

The market's immediate reaction suggests that investors have taken the Q2 update positively. Jefferies' Rs 1,280 target and 35 per cent potential upside have further strengthened the bullish narrative around the stock. With Citi and JPMorgan also maintaining positive views and setting targets above the current market price, Bajaj Finance has once again emerged as a closely watched financial stock.

The sharp rise in the share price does not automatically guarantee a sustained rally. Traders will need to monitor the Rs 1,020 resistance level closely, while long-term investors may focus more on AUM growth, margins, asset quality and the impact of the proposed capital raising.

For now, Bajaj Finance remains firmly in focus after its strong Q2 business update. The combination of accelerating AUM growth, a growing customer franchise, fresh capital plans and positive brokerage views has provided the stock with a strong catalyst. Whether the recovery can develop into a sustained uptrend will depend on upcoming financial results and the company's ability to maintain its strong growth trajectory.