Current Rating and Its Significance
MarketsMOJO currently assigns Bajaj Finance Ltd a 'Buy' rating, supported by a Mojo Score of 71.0. This score reflects a comprehensive evaluation of the company's quality, valuation, financial trend, and technical outlook. The 'Buy' rating suggests that the stock is expected to deliver favourable returns relative to the market, making it a recommended addition for investors seeking growth within the Non Banking Financial Company (NBFC) sector.
Quality Assessment: Strong Fundamentals
As of 28 December 2025, Bajaj Finance Ltd maintains an excellent quality grade, underscoring its robust business model and operational efficiency. The company boasts a long-term average Return on Equity (ROE) of 18.15%, signalling effective capital utilisation and consistent profitability. Operating profit has grown at an impressive annual rate of 26.28%, reflecting sustained expansion and operational leverage.
The latest six-month Profit After Tax (PAT) stands at ₹9,574.97 crores, having grown by 21.02%, while quarterly net sales reached a record ₹20,178.90 crores. Additionally, quarterly PBDIT hit a high of ₹13,872.31 crores, further confirming the company’s strong earnings momentum. These figures highlight Bajaj Finance’s ability to generate healthy cash flows and maintain a dominant position in its sector.
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- - Fundamental Analysis
- - Technical Signals
- - Peer Comparison
Valuation: Premium Pricing Reflects Market Confidence
Currently, Bajaj Finance Ltd is considered very expensive on valuation metrics. This premium pricing is indicative of strong investor confidence in the company’s growth prospects and market leadership. While the elevated valuation may temper near-term upside, it also reflects the market’s recognition of Bajaj Finance’s superior fundamentals and dominant sector position.
Investors should weigh this valuation against the company’s consistent earnings growth and market-beating returns to assess the risk-reward balance effectively.
Financial Trend: Positive Momentum Sustained
The financial trend for Bajaj Finance Ltd remains positive, supported by strong revenue growth and profitability. The company’s market capitalisation stands at ₹6,31,489 crores, making it the largest entity in the NBFC sector and accounting for 11.12% of the sector’s total market value. Annual sales of ₹76,194.74 crores represent 3.28% of the industry, underscoring its significant scale.
Market-beating performance is evident in the stock’s returns: as of 28 December 2025, Bajaj Finance has delivered a 46.75% return over the past year, substantially outperforming the BSE500 index’s 5.76% return. This strong performance is a testament to the company’s operational excellence and investor appeal.
Technical Outlook: Mildly Bullish Signals
From a technical perspective, the stock holds a mildly bullish grade. Despite a slight dip of 1.48% on the day of analysis, the stock’s medium-term trend remains positive, supported by steady price appreciation over the last six months (+5.08%) and three months (+1.50%). This technical stance suggests that while short-term volatility may occur, the overall momentum favours continued upward movement.
Institutional investors hold a significant 36.44% stake in Bajaj Finance Ltd, reflecting confidence from sophisticated market participants who typically conduct rigorous fundamental analysis before committing capital.
Turnaround taking shape! This Small Cap from NBFC sector just hit profitability with strong business fundamentals showing up. Catch it before the major breakout happens!
- - Recently turned profitable
- - Strong business fundamentals
- - Pre-breakout opportunity
Investor Takeaway: What the 'Buy' Rating Means
For investors, the 'Buy' rating on Bajaj Finance Ltd signals a favourable outlook based on a balanced assessment of quality, valuation, financial trends, and technical factors. The company’s excellent fundamentals and strong earnings growth provide a solid foundation for future returns, while the premium valuation reflects market expectations of continued leadership and expansion.
Investors should consider the stock’s current price in relation to its growth potential and sector dynamics. The mildly bullish technical indicators suggest that the stock remains well-positioned for further gains, although short-term fluctuations are possible. Institutional backing further reinforces confidence in the company’s prospects.
Overall, Bajaj Finance Ltd represents a compelling opportunity within the NBFC sector for investors seeking growth with a degree of stability, supported by strong fundamentals and market leadership.
Summary of Key Metrics as of 28 December 2025
- Mojo Score: 71.0 (Buy Grade)
- Return on Equity (ROE): 18.15% (Long-term average)
- Operating Profit Growth: 26.28% annualised
- Latest Six-Month PAT: ₹9,574.97 crores (21.02% growth)
- Quarterly Net Sales: ₹20,178.90 crores (highest recorded)
- Quarterly PBDIT: ₹13,872.31 crores (highest recorded)
- Market Capitalisation: ₹6,31,489 crores
- Institutional Holdings: 36.44%
- 1-Year Stock Return: +46.75% vs BSE500 +5.76%
These figures collectively underpin the 'Buy' rating and highlight Bajaj Finance Ltd’s position as a leading NBFC with strong growth prospects and market resilience.
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