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Bajaj Finance drops after Q2 profit misses Street expectations; should you buy, sell or hold shares now?

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Bajaj Finance shares tumbled on Wednesday a day after the non-banking financial company reported its financial results for the September quarter.

Bajaj Finance drops after Q2 profit misses Street expectations; should you buy, sell or hold shares now?
Bajaj Finance shares suffered sharp losses on Wednesday, a day after the non-banking financial company's profit for the July-September period missed Street estimates.
The Bajaj Finance stock traded 4.1 percent lower at Rs 7,528.1 on BSE in late morning deals, having slumped as much as 4.7 percent earlier in the day. 
After the market hours on Tuesday, the NBFC reported a 53.5 percent year-on-year rise in net profit to Rs 1,481 crore for the quarter ended September 30. Its net interest income - the difference between interest earned and interest expended - increased four percent to Rs 5,335 crore.
Analysts in a CNBC-TV18 poll had estimated Bajaj Finance's profit at Rs 1,495.2 crore in Q2 and NII at Rs 4,165 crore. (Read more on Bajaj Finance earnings)
Here's what brokerages say on Bajaj Finance after its Q2 results:
Morgan Stanley
The brokerage has an 'overweight' call on Bajaj Finance with a raised target price of Rs 9,060. The company's earnings momentum is set to pick up significantly, and the decibels around its new initiatives are expected to rise going forward, according to Morgan Stanley. Bajaj Finance's valuation is not cheap, but the stocks seldom pause against such a backdrop, it added.
HDFC Securities
Bajaj Finance’s Q2 numbers were 15 eprcent below estimates due to higher-than-expected provisioning, the brokerage said. HDFC Securities has revised its FY22 earnings estimate lower by four percent and the FY23 projection higher by four percent to factor in higher credit costs in the current financial year offset by higher AUM growth going forward. The brokerage said the current steep valuation of Bajaj Finance underpins its 'reduce' stance.
HDFC Securities, however, raised its target price for Bajaj Finance shares to Rs 5,498 from Rs 5,393.
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