Bajaj Finance Remains Jefferies' Top NBFC Pick Despite Leadership Change: 3 Reasons

Jefferies maintains a Buy rating on Bajaj Finance with a target price of Rs 1,044 per share, implying a 10% upside from current levels. Despite the surprise leadership change, the brokerage house believes the company's franchise is on a good footing to benefit from lower rates, improving asset quality, and rising credit demand. Jefferies expects Bajaj Finance to deliver 20% annual profit growth between FY25-FY28 and a FY26 return on equity of 19%.

Jefferies has retained its Buy rating on Bajaj Finance, with a target price of Rs 1,044 per share, indicating a 10% upside from current levels. The brokerage house's confidence in the company's franchise is evident despite the recent surprise leadership change. Jefferies believes that Bajaj Finance's strong foundation, coupled with lower interest rates, improving asset quality, and rising credit demand, will drive growth.

The newly appointed Managing Director, Anup Saha, resigned in April 2025, and Rajeev Jain, the former MD, has been elevated to the role of Executive Vice Chairman and will now serve as MD until March 2028. Jefferies anticipates a smooth transition under Jain's leadership, as his extensive experience and strong relationships with stakeholders will ensure continuity. However, the brokerage house expects the company to find and groom talent for the CEO/MD role in the medium term, given Jain's impending fourth term (16 years).

Jefferies expects Bajaj Finance to deliver 20% annual profit growth between FY25 and FY28 and projects a FY26 return on equity of 19%. The target price is based on a 4.9 times estimated price-to-book ratio for June 2027. The brokerage house believes that Bajaj Finance's franchise is well-positioned to benefit from the current economic conditions and is likely to continue its growth trajectory.

References:
[1] https://www.financialexpress.com/market/bajaj-finance-is-jefferies-top-nbfc-pick-despite-leadership-change-3-reasons-why-3922369/
[2] https://www.gurufocus.com/news/2987436/matson-matx-downgraded-by-jefferies-price-target-cut-to-115-matx-stock-news
[3] https://www.investing.com/news/stock-market-news/jefferies-starts-jefferson-capital-at-buy-on-growth-compliance-track-record-4144485