Bajaj Finance shares, stocks up by 3%

On March 25, 1987, Bajaj Auto Finance Limited was established as a non-banking financial organisation primarily focused on offering two and three-wheeler finance.

Bajaj Auto lending Ltd launched its initial public offering of equity shares after 11 years in the auto lending business and was then listed on the Bombay Stock Exchange and the National Stock Exchange of India.

Currently, Bajaj Finance shares rose 3% in Thursday trading after the NBFC announced a beat on profit and net interest income (NII), as well as an improvement in asset quality, prompting positive commentary from brokerages.

Despite rising interest rates, Bajaj Finance’s earnings increased by 30%, and its return on asset (ROA) exceeded 5% for the fifth quarter in a straight. JPMorgan believes Bajaj Finance warrants a higher valuation than private banks and has set a target price of Rs 9,000 for the stock. Morgan Stanley estimates that the stock is worth Rs 8,000.

However, brokerage estimates differ, with Kotak Institutional Equities recommending a goal of Rs 6,500. This is because some brokerages believe that rising competition intensity would result in slower asset under management (AUM) growth in the future.

The NBFC reported a 30% YoY increase in profit for the March quarter at Rs 3,158 crore and stated its net interest income (NII) for the quarter increased 28% YoY to Rs 7,771 crore. According to Bajaj Finance, it increased core asset under management (AUM) by Rs 16,537 crore in the March quarter and added 30.90 lakh new clients to the franchise. It added that its app platform has 3.55 crore net users and that all products and services are now available on digital platforms for the web and mobile devices.

According to YES Securities, Bajaj Finance not only outperformed expectations in terms of NII, pre-provision operating profit, and profit after tax by 4–7%, but its performance and comments also allayed growing concerns about growth, competition in the B2B market, and a slowdown in the housing portfolio. Concerns about the growth trajectory of new loan bookings, cross-selling, and the effects of probable NIM decrease on RoA were also addressed, the report said.