Citi turns cautious on Bajaj Finance; HSBC, Jefferies stay bullish post Q4 show

Shares of Bajaj Finance have rallied over 30 per cent in 2025, outperforming the Bank Nifty by a wide margin. But the sentiment has turned mixed after Q4FY25 results, with global brokerage Citi downgrading the stock to ‘Neutral’ from ‘Buy’. The firm also slashed its target price to Rs 9,830 from Rs 10,200, citing elevated credit costs and a muted growth outlook under the new CEO Anup Saha.

Citi flagged a decline in net interest margin (NIM), core earnings miss, and fee income guidance of just 13–15 per cent as downside risks. It also pointed to the management trimming its FY26 AUM growth forecast to 24–25 per cent, lower than the previous long-term goal of 25–27 per cent.

HSBC

While Citi turned cautious, HSBC reaffirmed its bullish stance. The brokerage maintained a ‘Buy’ call with a price target of Rs 10,800. It sees FY25 EPS growth having bottomed at 16 per cent and expects a 25 per cent CAGR in EPS through FY28. According to HSBC, Bajaj Finance’s earnings quality is second only to ICICI Bank and superior to most NBFC peers.

“Valuation multiples remain justified due to the company’s robust profitability and growth profile,” it noted. However, HSBC also trimmed its fee income assumptions slightly and flagged potential risks from slower growth or elevated credit costs.

Jefferies

Jefferies echoed optimism with a ‘Buy’ rating and a target of Rs 10,440. It noted that the Q4 print was broadly in line and credited management for using tax write-backs to shore up buffer provisions. While it lowered FY26–27 earnings estimates by 2 per cent, Jefferies believes valuation premiums can sustain due to the firm’s scale, profitability, and moderated credit costs.

The brokerage also took note of the leadership transition, stating that Anup Saha’s lower growth guidance remains “credible and realistic.”

Emkay Global

Emkay Global has retained its ‘Add’ stance with an unchanged target price of Rs 9,200. It highlighted that despite a challenging environment, Bajaj Finance mostly met FY25 targets, though credit costs came in above guided range. Emkay now expects FY26–27 earnings to be 2–3 per cent lower due to trimmed AUM and revised credit cost guidance of 1.85–1.95 per cent.

What the street says

Out of 38 analysts tracking Bajaj Finance, 25 continue to rate it as a ‘Buy’, with eight recommending ‘Hold’ and just five advising ‘Sell’. The company’s Rs 290 crore tax reversal provided a buffer in Q4, but the street is now closely watching its execution under new leadership and ability to defend ROE and NIM amid macro headwinds.

The stock ended flat on Tuesday at Rs 9,105, not far from its record high of Rs 9,660.

Despite Citi’s downgrade, bulls aren’t backing off just yet. With strong capital buffers, high earnings quality, and a clear FY26–28 roadmap, Bajaj Finance still finds favour among top global brokerages.