Here is what triggered gains of up to 9% in shares of Bajaj Finance and Bajaj Finserv

Brokerage firm Citi has opened a 90-days positive catalyst watch on shares of Bajaj Finance Ltd. on Thursday, January 2. In response, the stock has gained up to 6% and is also among the top performers on the Nifty 50 index.

Citi has a “buy” rating on Bajaj Finance with a price target of ₹8,150 per share, which implies a potential upside of 18% from Wednesday’s closing levels.

The brokerage said that after the credit cost guidance revision in the September quarter to 2.05% for financial year 2025, it expects only a marginal uptick in the December quarter credit costs to 2.2% to 2.25%. Bajaj Finance initiated risk actions by cutting segments and pruning exposures as well, as per Citi.

Bajaj Finance

may report an Assets Under Management (AUM) growth of 6% sequentially and 27% year-on-year for the December quarter, despite rising stress and a run-down of captive two-wheeler and three-wheeler financing, Citi wrote in its note.

The brokerage also expects a positive bias for Bajaj Finance’s Net Interest Margins (NIMs) by three to five basis points as Cost of Funds have peaked in the September quarter and growth is being led by high-yielding segments.

However, Citi does highlight that updates on the management transition will be critical for Bajaj Finance with their assessment leaning more towards an executive role at Bajaj Finance or within the Group, for incumbent MD & CEO Rajeev Jain.

Out of the 36 analysts that have coverage on Bajaj Finance, 26 of them have a “buy” rating on the stock, while six and four analysts each have a “hold” and “sell” rating on the stock respectively.

Shares of Bajaj Finance are trading with gains of 5.8% at ₹7,340. The stock had negative returns in 2024, the second time in the last three years. On the flip side, shares of Bajaj Finserv are outperforming those of Bajaj Finance, currently trading with gains of 7.9% at ₹1,700.7.