The stock bled 4% on Friday, closing at ₹865 on the NSE after dipping as low as 6.5% in the opening trade. The slide wasn’t just a reaction to the numbers; it was a pivot in sentiment. Management lowered the full-year Asset Under Management (AUM) growth guidance to 15%–17%, down from the 18% projected earlier. They pointed to the West Asia conflict and a sub-par monsoon as the primary headwerts weighing on rural lending demand.
The profit miss was sharper than the top-line slowdown. CLSA noted that Profit After Tax (PAT) missed their estimates by 4%, driven by elevated credit costs that outpaced the gain in Pre-Provisioning Operating Profit (PPOP). JPMorgan echoed this, flagging a rise in both Gross Stage 2 and Stage 3 assets. Their commentary suggests the credit cost spike isn’t broad-based but is concentrated in specific product lines, a nuance that keeps the 'sell' verdicts at zero.
The sell-side reaction was swift but not fatal. HSBC cut its target to ₹1,000 from ₹1,140, while JPMorgan slashed its by over ₹100 to ₹1,095. Citi and CLSA both landed at ₹1,100. Yet, the consensus remains bullish. With 38 out of 41 analysts rating the stock a 'buy' and three on 'hold', the average target price implies a 34.4% upside from current levels.
The management team, including CEO Nilay Joshi, framed the credit cost increase as a temporary, cyclical blip rather than a structural break. They expect normalization within two to three quarters. Until then, the equity buffer should keep margins elevated before they normalize. The stock is down 15% year-to-date and sits 25% below its 52-week high of ₹1,153, a discount that long-term value hunters are now scrutinizing for an entry point.