Index Membership and Market Capitalisation Significance
Bajaj Finance Ltd holds a commanding position within the Nifty 50, India’s premier equity benchmark, with a market capitalisation of approximately ₹6,28,035.09 crores, categorising it firmly as a Large Cap stock. Its inclusion in this index not only reflects its substantial market presence but also ensures heightened visibility among institutional investors and index funds, which often track or replicate the Nifty 50 composition.
The company’s Price-to-Earnings (P/E) ratio stands at 34.62, notably higher than the NBFC industry average of 22.19, signalling investor expectations of sustained growth and premium valuation. This premium is supported by Bajaj Finance’s consistent outperformance relative to the Sensex and sector peers over multiple time horizons.
Over the past decade, Bajaj Finance has delivered a staggering 1,568.61% return, vastly outpacing the Sensex’s 247.45% gain. Even on shorter time frames, the stock has outperformed, with a 5-year return of 83.54% versus the Sensex’s 61.88%, and a 3-year return of 58.53% compared to the benchmark’s 35.73%. These figures underscore the company’s ability to generate shareholder value consistently.
Recent Performance and Market Dynamics
In the immediate term, Bajaj Finance’s stock has experienced some pressure, declining by 0.49% on the day of 20 Feb 2026, underperforming the Sensex’s marginal fall of 0.15%. The stock has recorded a consecutive two-day decline, cumulatively losing 0.99% in returns. However, it remains above its 20-day, 50-day, 100-day, and 200-day moving averages, indicating that the medium- to long-term technical trend remains intact despite short-term volatility. The stock is currently trading below its 5-day moving average, suggesting some near-term consolidation.
Sector-wise, the NBFC space has seen mixed results in recent earnings announcements, with 23 companies reporting results: six positive, twelve flat, and five negative. Bajaj Finance’s performance within this context is critical, given its leadership role and influence on sector sentiment.
Only 1% make it here. This Large Cap from the Gems, Jewellery And Watches sector passed our rigorous filters with flying colors. Be among the first few to spot this gem!
- - Highest rated stock selection
- - Multi-parameter screening cleared
- - Large Cap quality pick
Institutional Holding Trends and Rating Adjustments
Institutional investors remain key stakeholders in Bajaj Finance, with their holdings influencing liquidity and price stability. Recent data indicates a subtle shift in institutional sentiment, reflected in the downgrade of the company’s Mojo Grade from Buy to Hold as of 1 Feb 2026. The current Mojo Score stands at 65.0, signalling a cautious stance amid evolving macroeconomic factors and sector-specific challenges.
This rating adjustment suggests that while Bajaj Finance retains its fundamental strengths, investors should be mindful of potential headwinds, including regulatory changes, credit cycle fluctuations, and competitive pressures within the NBFC sector. The Market Cap Grade remains at 1, affirming the company’s large-cap status and relative market dominance.
Despite the downgrade, Bajaj Finance’s year-to-date return of 2.30% outperforms the Sensex’s negative 3.34%, highlighting its defensive qualities in a volatile market environment. Over the past month, the stock has gained 8.12%, significantly ahead of the Sensex’s 0.24% rise, further emphasising its resilience.
Benchmark Status and Sector Influence
As a Nifty 50 constituent, Bajaj Finance’s stock movements carry considerable weight in index calculations and investor portfolios. Its performance often serves as a barometer for the NBFC sector’s health and investor appetite for financial services stocks. The company’s robust market capitalisation and liquidity make it a preferred choice for passive funds and ETFs, which in turn stabilises demand and supports valuation multiples.
Moreover, Bajaj Finance’s leadership in innovation, digital lending, and diversified product offerings positions it favourably against peers. This strategic positioning has contributed to its superior long-term returns and sustained investor interest despite short-term market fluctuations.
Is Bajaj Finance Ltd your best bet? SwitchER suggests better alternatives across peers, market caps, and sectors. Discover stocks that could deliver more for your portfolio!
- - Better alternatives suggested
- - Cross-sector comparison
- - Portfolio optimization tool
Strategic Outlook for Investors
Investors analysing Bajaj Finance Ltd should weigh its strong historical performance and market leadership against the recent rating downgrade and short-term price pressures. The company’s premium valuation relative to the NBFC sector reflects confidence in its growth trajectory, but also implies sensitivity to broader economic shifts and sector-specific risks.
Given its status as a large-cap Nifty 50 stock, Bajaj Finance remains a core holding for many institutional and retail portfolios. However, the recent Mojo Grade adjustment to Hold suggests a prudent approach, encouraging investors to monitor upcoming quarterly results, credit quality metrics, and regulatory developments closely.
Long-term investors may find value in the company’s consistent outperformance and strategic initiatives, while short-term traders should be cautious of volatility around moving averages and sector earnings trends.
Conclusion
Bajaj Finance Ltd’s role as a key Nifty 50 constituent and a leader in the NBFC sector underscores its importance in India’s equity markets. Despite a recent downgrade in its Mojo Grade and short-term price softness, the company’s robust fundamentals, superior long-term returns, and institutional backing continue to make it a significant player for investors. Navigating the evolving market landscape will require careful analysis of sector dynamics, institutional flows, and valuation metrics to optimise portfolio outcomes.
Only Rs. 9,999 - Get MojoOne for 1 Year + 3 Months FREE (60% Off) Start Today
