Shares of Bajaj Finance fell sharply after the lender reported its Q3 results, as investors reacted nervously to a spike in credit provisions, despite healthy business growth and a supportive broker outlook.
For the December quarter, Bajaj Finance posted a year-on-year decline in net profit, largely due to higher provisioning for potential loan losses and one-time costs. While the company continued to grow its loan book at a strong pace, the higher buffers taken to protect against future stress weighed on earnings and market sentiment.
The stock came under pressure even though the company’s core operations remained resilient. Net interest income rose strongly, supported by steady demand for consumer and SME loans. Assets under management also recorded robust growth, highlighting that borrowing activity remains intact across segments.
Adding a contrasting note, global brokerage JPMorgan upgraded the stock, citing confidence in Bajaj Finance’s long-term growth story, strong franchise, and improving asset quality over time. However, the upgrade failed to calm near-term concerns, as investors focused on the immediate impact of elevated provisions on profitability.
Market participants remain cautious, noting that while Bajaj Finance continues to deliver on business expansion and customer acquisition, credit costs and regulatory-related expenses could keep earnings under pressure in the short term.
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