Bajaj Finance Steady as RBI Hikes Rate to 5.50%

Bajaj Finance shares were nearly flat at Rs 964 on Wednesday, up a marginal 0.09%, after the RBI's Monetary Policy Committee delivered the expected 25 basis point hike today, taking the repo rate to 5.50% from 5.25%, its first increase in nearly four years. Why Bajaj Finance Is in Focus: As India's largest diversified NBFC by market value, Bajaj Finance sits at the centre of how a rate hiking cycle plays out for lenders. Nomura flagged this scenario last week, assuming a 50 to 60 bps rise in funding costs this quarter, estimating it could trim FY27 EPS by roughly 1 to 8%. The brokerage still kept Bajaj Finance a preferred pick among diversified lenders, with a 12 month target of Rs 1,270, citing its mix of floating rate assets and shorter tenure fixed rate loans as a cushion versus peers. The Balancing Act Ahead: NBFCs typically borrow short and lend across mixed tenures, so a sudden jump in funding costs squeezes margins before it can be passed on. Analysts expect Bajaj Finance and peers to delay raising customer rates until well into FY28, meaning near term pressure falls on the lender's margins, not the borrower's EMI, at least initially. The stock's muted reaction today suggests the move was already priced in, consistent with bond yields climbing into the policy date. The stock has ranged between Rs 787.90 and Rs 1,176.40 over the past 52 weeks, with a market capitalisation of about Rs 5.99 lakh crore. With rate guidance now delivered, the next trigger is likely commentary on asset quality and loan growth in quarterly results. Disclosure: Palash Kag, Proprietor, Sarathi Research (SEBI Reg. No. INH000012740). No position held in Bajaj Finance. This article is for educational and informational purposes only and does not constitute investment advice or a recommendation to buy, sell, or hold any security. Please consult a registered advisor before making investment decisions.