He said this guidance change triggered the recent market correction. “In such a situation, even a small near-term disappointment tends to take a little off a stock price and probably give another opportunity for a set of long-term investors to come into this,” Chakrabarty explained.Also Read | DFS Secy Nagaraju: Require new bank licences for Viksit Bharat; NBFCs, SFBs could become universal banks
Despite short-term concerns, he reiterated that Bajaj Finance remains his top NBFC pick. He pointed out that the company’s long-term guidance is unchanged and expects a lower growth base in the second half of financial year 2025-26 (FY26) to set the stage for a stronger financial year 2026-27 (FY27). He highlighted a sharp pickup in rural business and a strong performance in October as encouraging signs. The stock, he said, is shifting from a “sharp re-rating story” to a “compounding story,” creating a “very clear opportunity” for long-term investors.
Addressing worries that stress in Bajaj Finance’s MSME loan book could signal broader market issues, Chakrabarty clarified that MSME exposure varies widely between NBFCs and large banks. While some stress is visible in unsecured working capital loans, he said the impact on major banks such as HDFC Bank or ICICI Bank should be limited, as these exposures form a small part of their balance sheets.
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Within the banking space, Chakrabarty said he prefers Axis Bank, which BNP Paribas recently upgraded. He called its latest quarterly performance the strongest in six to seven quarters, citing improvement in growth and profitability. “We have upgraded the targeted multiple from 1.7 to 1.9. Frankly, if this is a 15-16% ROE bank, it could command potentially mid-twos,” he said.
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