Bajaj Finserv Ltd stock surges 3% on Motilal Oswal coverage initiation with neutral rating and Rs 1900 target

Bajaj Finserv Ltd stock rallied up to 3.08% on BSE to Rs 1758.80 amid Motilal Oswal starting coverage with 'Neutral' rating and Rs 1900 target, implying 11% upside. ISIN: INE296A01024. The move highlights broad-based growth in lending, insurance, driven by Bajaj Finance's strong AUM and profitability, drawing US investor interest in India's expanding fintech sector.

Bajaj Finserv Ltd stock jumped as much as 3.08% on the BSE on March 25, 2026, hitting an intraday high of Rs 1758.80 per share, fueled by Motilal Oswal Financial Services initiating coverage with a 'Neutral' rating and a target price of Rs 1900. This implies about 11% upside from recent levels and underscores the company's shift toward broad-based growth across lending, insurance, and digital platforms. For US investors, this signals opportunity in India's fast-growing non-banking financial company (NBFC) space, where Bajaj Finserv benefits from regulatory tailwinds and a massive customer base.

As of: 25.03.2026

By Elena Vasquez, Senior Financial Analyst for Emerging Markets Fintech. Bajaj Finserv Ltd exemplifies how Indian NBFCs are leveraging digital transformation to capture retail lending and insurance growth amid rising consumer finance demand.

Motilal Oswal Coverage Sparks Intraday Rally

Bajaj Finserv Ltd shares gained 2.38% early in the session on BSE, climbing to Rs 1745.00, before accelerating to a 2.93% rise at Rs 1754.30 and peaking at 3.08% up with Rs 1758.80. This outperformed the Sensex's 1.87% advance, pointing to stock-specific momentum rather than broad market lift. The catalyst was Motilal Oswal's research note, which highlighted the company's entry into a phase of diversified expansion.

Analysts at Motilal Oswal emphasized Bajaj Finserv's strengthening footprint in consumer lending, general insurance, and emerging fintech services. They project profit after tax (PAT) from core businesses, including Bajaj Finance and Bajaj General Insurance, to grow at a 28% CAGR through FY28. This coverage comes as the stock recovers from a 3.96% weekly dip and a sharper 14.18% monthly decline, positioning it as a relief rally amid mixed technical signals.

Bajaj Finance Anchors Group Performance

Bajaj Finance, in which Bajaj Finserv holds a 51.3% stake, remains the cornerstone, contributing 54% of revenue in 9MFY26. Its assets under management (AUM) reached Rs 4.8 trillion by end-9MFY26, reflecting a 23% CAGR from FY20 to FY25. This scale supports a customer franchise of nearly 110 million users, driving predictable earnings and high return on equity (ROE) in the 13-14% range.

Motilal Oswal forecasts Bajaj Finance's revenue and profit to compound at 15% and 17% CAGRs over FY26-28. Strong profitability metrics, including an ROE of 12.66% and a debt-to-equity ratio of 5.13, bolster its appeal. For US investors eyeing India exposure, this subsidiary's retail lending focus taps into underserved consumer credit markets, mirroring growth patterns in global fintech peers.

Insurance Arms Show Profitability Edge

Bajaj General Insurance, accounting for 24% of 9MFY26 revenue, ranks as India's third-largest general insurer with a 7.1% YTDFY26 market share. It posted a combined ratio of 100.8% in 9MFY26, among the sector's best, reflecting efficient underwriting. Diversification into motor, health, and fire segments, plus emphasis on high-margin products, supports a projected 12% GWP CAGR through FY28.

Bajaj Life Insurance's value of new business (VNB) is seen growing at 19% CAGR. Motilal Oswal notes digital efficiencies enhancing margins across these units. This blend of lending and insurance creates a resilient revenue mix, appealing to US investors seeking diversified plays in emerging market financial services, where insurance penetration remains low at under 5% of GDP.

Emerging Businesses Eye Breakeven

Bajaj Finserv's newer ventures in payments, wealth management, and digital platforms are scaling toward profitability. These segments, though smaller, benefit from the group's 110 million customer base and tech infrastructure. Motilal Oswal anticipates gradual breakeven as adoption rises, complementing core operations.

The PE ratio stands at 14.21 versus the industry's 17.74, suggesting relative value despite recent underperformance. Year-to-date, the stock is down 13.74% versus Sensex's 11.40% drop, but longer-term returns shine with 41.70% over three years and 94.11% over five. Technically, it trades above the 5-day moving average but below longer ones, indicating short-term positivity.

Why US Investors Should Watch Bajaj Finserv Now

US investors gain indirect exposure to India's booming consumer finance via ADRs or ETFs holding Bajaj Finserv Ltd, amid a financial sector projected to grow 15% annually. The company's tech-led model mirrors US fintech leaders like Affirm or SoFi, but with higher growth from India's 1.4 billion population and rising middle class. Regulatory reforms easing NBFC lending norms further enhance appeal.

Motilal Oswal's Rs 1900 target equates to a FY28 PE of 22x, reasonable given 28% PAT CAGR projections. With AUM expansion and insurance profitability, Bajaj Finserv offers compounding potential. For portfolio diversification, it provides a hedge against US rate volatility through emerging market yield.

Risks and Open Questions Ahead

Despite the rally, Bajaj Finserv Ltd faces headwinds from recent weakness, with a 14.18% monthly drop signaling volatility. High debt-to-equity at 5.13 raises leverage concerns in a rising rate environment. Competition from banks and fintech upstarts could pressure margins, while regulatory scrutiny on NBFCs persists.

Technical resistance from 20-day and longer moving averages questions sustainability. Weekly 3.96% dip reflects broader sentiment caution. US investors must weigh currency risks, with INR exposure adding forex volatility. Breakeven timelines for new businesses remain uncertain if consumer spending slows.

Longer-term, asset quality in lending and claims inflation in insurance pose risks. Investors should monitor Q4FY26 earnings for AUM growth confirmation and ROE stability. Overall, while coverage provides a floor, sustained upside hinges on execution amid economic cycles.

Disclaimer: This is not investment advice. Stocks are volatile financial instruments.