Understanding the Current Rating
The Buy rating assigned to Bajaj Finance Ltd indicates a positive outlook on the stock’s potential for returns relative to its risks. This recommendation is based on a comprehensive evaluation of four key parameters: Quality, Valuation, Financial Trend, and Technicals. Each of these factors contributes to the overall assessment of the company’s investment appeal as of today.
Quality Assessment
As of 09 January 2026, Bajaj Finance Ltd maintains an excellent quality grade. This reflects the company’s strong fundamentals and operational efficiency. The firm boasts a robust long-term Return on Equity (ROE) averaging 18.15%, signalling effective capital utilisation and consistent profitability. Additionally, operating profit has grown at an impressive annual rate of 26.28%, underscoring sustained growth momentum. Quarterly figures reinforce this strength, with net sales reaching a record ₹20,178.90 crores, PBDIT at ₹13,872.31 crores, and PAT at ₹4,875.36 crores, all marking the highest levels recorded to date.
Valuation Considerations
Despite the strong quality metrics, the stock is currently rated as very expensive in terms of valuation. This suggests that the market price reflects a premium relative to earnings and book value, which is typical for a large-cap leader in the Non-Banking Financial Company (NBFC) sector. Investors should be mindful that while the valuation is elevated, it is often justified by the company’s dominant market position and growth prospects. The market cap stands at ₹6,04,701 crores, making Bajaj Finance the largest player in its sector, representing 10.45% of the entire NBFC market.
Financial Trend and Performance
The financial grade for Bajaj Finance Ltd is currently positive, reflecting favourable trends in earnings and returns. The stock has delivered a market-beating 34.93% return over the past year, significantly outperforming the BSE500 index return of 7.13% during the same period. Shorter-term returns show some volatility, with a 1-month decline of 3.39% and a 3-month dip of 4.12%, but a 6-month gain of 4.42% indicates resilience. Year-to-date, the stock is marginally down by 0.47%, while the 1-day gain of 1.05% suggests renewed buying interest. Institutional investors hold a substantial 36.44% stake, signalling confidence from sophisticated market participants who typically conduct rigorous fundamental analysis.
Technical Outlook
The technical grade is assessed as mildly bullish, indicating a cautiously optimistic trend in the stock’s price movement. This suggests that while the stock is showing signs of upward momentum, investors should remain attentive to market fluctuations and broader economic factors that could influence short-term price action. The mildly bullish technical stance complements the positive financial trend and excellent quality, supporting the overall Buy rating.
Sector and Market Position
Bajaj Finance Ltd’s leadership in the NBFC sector is a key factor in its rating. With annual sales of ₹76,194.74 crores, the company accounts for 3.27% of the industry’s total sales, reinforcing its scale and influence. Its large market capitalisation and strong institutional backing further enhance its stability and growth potential. Investors looking for exposure to the NBFC sector may find Bajaj Finance’s combination of quality and market presence compelling despite the premium valuation.
Here's How the Stock Looks TODAY
As of 09 January 2026, the latest data confirms Bajaj Finance Ltd’s position as a high-quality, well-managed company with strong growth prospects. The stock’s 1-year return of 34.93% highlights its ability to outperform the broader market, while the excellent quality grade and positive financial trend provide a solid foundation for future performance. However, the very expensive valuation grade advises investors to consider the premium they are paying and to weigh it against the company’s growth and profitability metrics.
Investors should also note the mildly bullish technical grade, which suggests that while the stock is trending upwards, some caution is warranted in the short term. Overall, the Buy rating reflects a balanced view that recognises Bajaj Finance Ltd’s strengths and market leadership, while acknowledging valuation considerations and market dynamics.
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Implications for Investors
For investors, the Buy rating on Bajaj Finance Ltd suggests that the stock remains a favourable choice within the NBFC sector, particularly for those seeking exposure to a company with strong fundamentals and a proven track record of growth. The excellent quality and positive financial trend indicate that the company is well-positioned to sustain its performance over the medium to long term.
However, the very expensive valuation grade serves as a reminder to carefully consider entry points and to monitor market conditions. Investors should balance the potential for continued capital appreciation against the risks associated with paying a premium price. The mildly bullish technical outlook supports a cautiously optimistic stance, encouraging investors to stay engaged but vigilant.
Summary
In summary, Bajaj Finance Ltd’s current Buy rating by MarketsMOJO, last updated on 17 March 2025, is underpinned by excellent quality, positive financial trends, and a mildly bullish technical outlook. While valuation remains elevated, the company’s market leadership, strong institutional support, and robust returns make it a compelling option for investors seeking growth in the NBFC space as of 09 January 2026.
About MarketsMOJO Ratings
MarketsMOJO’s rating system integrates multiple dimensions of stock analysis to provide investors with a comprehensive view of a company’s investment potential. The Buy rating reflects a favourable balance of quality, valuation, financial health, and technical factors, guiding investors towards stocks with strong prospects relative to their risks.
Investors are encouraged to consider these ratings alongside their own research and investment goals to make informed decisions in today’s dynamic market environment.
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