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Bajaj Finance: Why It Has Outperformed the Nifty—and What Investors Should Watch

Bajaj Finance’s relative resilience is supported by reported growth and asset-quality figures, but its proposed capital raise, per-share impact and valuation still matter.
From TheFinanceBase Team5 min to read
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Bajaj Finance has held up better than the broader Indian market in 2026, while reporting strong loan-book growth and improving asset-quality indicators. That makes it a relative outperformer, not a guaranteed winner: the market comparison is dated, the proposed capital raise could affect per-share returns, and the bullish earnings case depends partly on broker forecasts rather than company guidance.

How Bajaj Finance compared with the Nifty

An Economic Times article published October 4, 2026, reported that Bajaj Finance shares were down about 2% in 2026 to that point, compared with a nearly 13% decline in the Nifty. These are the article’s dated figures, not live prices or an independently checked index comparison. The same article said the Nifty fell about 6% in September.

The article linked the market weakness to foreign selling, high US bond yields, elevated crude prices, a weaker rupee and investor risk aversion. It reported Indian equity outflows of $2.7 billion in September and $26.8 billion year to date. Those flow figures and the explanation are secondary-source reporting; they do not establish that any one factor caused Bajaj Finance’s relative performance. Financial stocks also faced wider risk aversion and regulatory concerns, according to the article.

What supports the relative-resilience case

Reported growth and profitability

Bajaj Finance’s Q1 FY27 investor presentation reports assets under management (AUM) of ₹400,388 crore and profit after tax (PAT) of ₹5,346 crore for the quarter. As of June 30, 2026, capital adequacy was 20.90% including Tier II capital, and Tier I capital was 20.01%. The company’s Q1 FY27 investor presentation also sets out its AUM across urban, rural, SME, commercial and mortgage segments.

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The Economic Times article additionally reported 24% year-over-year AUM growth, stable net interest margins, improving asset quality, lower credit cost on guided lines and profit 5% above estimate. Those comparisons and analyst-estimate references are the article’s reporting, rather than independently confirmed figures in the company presentation cited here.

Asset-quality indicators

Bajaj Finance’s FY2026 annual report page lists gross non-performing assets (GNPA) of 1.01% and net non-performing assets (NNPA) of 0.41%. These are reported year-end measures, not a promise that future credit losses will remain at the same level. The article says UBS cited improved asset quality and increased provision coverage in changing its rating, but the underlying UBS note was not reviewed.

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Scale and business mix

The company serves consumer finance, personal loans, MSMEs, gold loans, vehicle financing and commercial businesses, and describes a strategy focused on meeting customer needs through technology and AI while maintaining a risk culture. Its scale can support growth across multiple lending categories, but performance still depends on credit discipline, funding and borrowers’ ability to repay.

What the proposed capital raise could mean

The October 4 Economic Times article reported that Bajaj Finance’s board approved a proposed ₹17,500 crore raise: ₹11,700 crore through a qualified institutional placement (QIP) and ₹5,800 crore through promoter warrants to Bajaj Finserv. The report describes an approval and proposed financing, not a completed raise. The board filing and original brokerage notes were not independently inspected.

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The capital could give the lender additional capacity to fund growth, but issuing shares or warrants can also affect existing shareholders’ percentage ownership and per-share measures. The article attributed to Jefferies estimates that the planned capital represents about 3% of market capitalization and 13% of estimated FY27 net worth; it could lift estimated FY28 book value per share by 8%, leave earnings per share (EPS) broadly flat and marginally lower return on equity (ROE). These are broker estimates, not actual outcomes or issuer guidance.

The article also cited Jefferies’ reported leverage figure of 4.9 times and retained ROE of 17%, and suggested loan growth, possible monetization of Bajaj Finance’s reported 87% stake in Bajaj Housing Finance, and management succession expected in March 2028 as possible reasons for raising capital. These points should be treated as the article’s account of the brokerage view, not as independently verified explanations from the company.

What analysts expect—and why it is not a return forecast

The Economic Times reported that UBS moved its rating from Sell to Neutral and raised its target price from ₹910 to ₹1,100, citing asset-quality improvement and higher provision coverage. It also reported UBS’s forecast of more than 30% EPS growth in FY27, slowing to the high teens in FY28. The target and growth rates are analyst expectations, not guaranteed share-price returns or company guidance.

Jefferies’ reported view was more restrained on earnings per share: its estimates anticipated broadly flat EPS despite a higher FY28 book value per share following the proposed capital raise. That distinction matters. More capital and a larger book value do not automatically translate into faster earnings growth or a higher return for each existing share.

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Company results provide context, not a valuation

Bajaj Finance’s FY2026 annual report lists AUM of ₹509,975 crore and net total income of ₹53,324 crore. It reports PAT of ₹20,689 crore and ROE of 19.2%, with both measures marked to exclude specified adjustments: an additional ECL provision of ₹1,406 crore, management and macroeconomic overlays of ₹142 crore, and a one-time New Labour Codes charge of ₹265 crore, all recognized in FY2026. The annual report also lists a customer franchise of 119.33 million.

These figures show the company’s scale and recent profitability, but they do not tell an investor whether the share price is attractive. The evidence cited here does not include a complete valuation analysis, comparable peer valuations or a full peer operating comparison.

How to assess the investment case

Relative performance answers how a share has behaved over a particular period; it does not establish what it will do next. Before treating Bajaj Finance as a potential investment, compare the following factors over consistent dates and definitions:

  • Loan and AUM growth: Check whether expansion is sustained and broad-based across the company’s lending segments.
  • Credit quality and provisions: Track GNPA, NNPA, provision coverage and credit costs together; one improved indicator alone does not settle the risk question.
  • Capital and dilution: Follow the proposed QIP and warrants through completion, then assess their effect on leverage, ownership and per-share measures.
  • Profitability: Compare reported EPS growth and ROE with forecasts, while checking whether figures include or exclude significant adjustments.
  • Valuation and performance window: Compare valuation and share-price returns with peers and the Nifty over the same dates. The cited figures do not provide that analysis.

For the market comparison, rely on the October 4, 2026 article only as a dated snapshot. For reported operating metrics, use Bajaj Finance’s investor presentation and FY2026 annual report, keeping their reporting periods and accounting qualifications intact.

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