Bajaj Finance, IEX, and APL Apollo Stocks Take Big Hits Amid Market Correction

Bajaj Finance and Bajaj Finserv are down after Q1 earnings reports, citing emerging stress in the MSME segment. IEX is up 11% after a kneejerk reaction yesterday, with investors digesting the immediate implications. APL Apollo Tubes have slumped 7% due to lower EBITDA/tonne and subdued volumes. Cipla is one of the star gainers, up 5.5% despite a weak market. Reliance Power is down 5% after ED action.

Bajaj Finance and Bajaj Finserv reported their Q1 FY26 earnings on July 24, 2025, with both companies indicating emerging stress in the MSME segment. While the companies reported strong overall performance, the stress in the MSME segment has sparked investor concerns and led to a sell-off in their shares.

Bajaj Finance

Bajaj Finance, the country's largest retail non-banking finance company, reported a consolidated profit after tax of ₹4,765 crore, up 22% from a year ago. The company flagged unexpected stress in its unsecured MSME loan portfolio, with signs of slowing incremental disbursements and new customer additions. Despite this, the company reported a 22% increase in consolidated net interest income to ₹10,227 crore [1].

The company's vice chairman and managing director, Rajeev Jain, highlighted over-leverage of customers as a significant pain point. Loan loss and provisions rose 26% year-on-year to ₹2,120 crore, primarily due to elevated slippages in the MSME book and the two- and three-wheeler loan portfolio. The company expects both these segments to grow slower for the remainder of FY26.

Bajaj Finserv

Bajaj Finserv, a subsidiary of Bajaj Finance, also reported stress in the MSME segment. The company cited rising stress in MSME and early delinquency buckets, though overall provisioning remains strong. The company's shares fell nearly 5% on Friday, despite reporting a strong performance in its June quarter, driven by the expansion of its loan book and customer base [2].

Market Reaction

The stock market reacted to the earnings reports with a sell-off in both Bajaj Finance and Bajaj Finserv shares. Bajaj Finance shares fell nearly 5%, while Bajaj Finserv shares fell 7%. IEX, on the other hand, gained 11% after a kneejerk reaction, with investors digesting the immediate implications. APL Apollo Tubes slumped 7% due to lower EBITDA/tonne and subdued volumes, while Cipla was one of the star gainers, up 5.5% despite a weak market. Reliance Power was down 5% after ED action.

References

[1] https://www.livemint.com/industry/banking/bajaj-finance-unexpected-stress-in-unsecured-msme-loans-disbursements-earnings-q1-asset-quality-q1-result-nfbc-fy26-11753373527495.html
[2] https://stocktwits.com/news-articles/markets/equity/bajaj-finance-shares-asset-stress-signals-keep-bulls-cautious-sebi-r-as-flag-970-as-key-level/choGtYHR5vW