Bajaj Finance has been given a "Buy" rating by Sharekhan, with a revised price target of Rs 9,500. The company's recent operating performance met expectations, although earnings growth was dampened by an increase in credit costs.

Management has stated that credit costs may have reached their peak in Q2, pointing to lower bounce rates and moderated additions to stage 2 and stage 3 accounts as positive indicators. Despite an increase in overall credit cost guidance to 2.05% for FY25, the outlook for the second half of FY25 is more positive than the first half.

The stock is currently trading at attractive multiples of 4.2x, 3.5x, and 3.0x FY2025E, FY2026E, and book value estimates, respectively. Sharekhan believes that as credit costs stabilize and earnings growth aligns with asset growth, there is strong potential for improvement in stock performance.