Bajaj Finance fell 2.55% to Rs 6560 on Wednesday. Bajaj Finance’s market capitalization declined to Rs 4.08 lakh crore. On the BSE, 0.40 lakh shares of the firm changed hands, resulting in a turnover of Rs 26.23 crore.
Bajaj Finance shares plummeted more than 2% in early trading on Wednesday after the NBFC released its first-quarter results. Net profit increased by 14% in the first quarter of 2024 to Rs 3,912 crore, up from Rs 3,437 crore in the same quarter in 2023. In Q1, revenue was Rs 16,098 crore, compared to Rs 12,497 crore in the June 2023 quarter.
On Wednesday, the shares decreased 2.55% to Rs 6560. Bajaj Finance’s market capitalization dropped to Rs 4.08 lakh crore. On the BSE, 0.40 lakh shares of the company changed hands, for a total turnover of Rs 26.23 crore.
Bajaj Finance has a relative strength index (RSI) of 35.4, indicating that the stock is neither oversold nor overbought. A number below 30 is considered oversold, while a figure beyond 70 is considered overbought. Bajaj Finance has a one-year beta of 0.9, which indicates modest volatility throughout the time.
Following Q1 earnings, Motilal Oswal has maintained a neutral attitude. It set a target price of Rs 7,500, up 11% from the previous closing.
“We lowered our FY26 PAT forecast by 3% to account for increased steady-state normalized credit costs. We predict a CAGR of 27%/24% in AUM/PAT between FY24 and FY26, with Bajaj Finance delivering RoA/RoE of 4.2%/22% in FY26. Despite a robust PAT CAGR of 24% between FY24 and FY26E, and RoA/RoE of 4.2%/22% in FY26E, we see few upside catalysts. As a result, we retain our Neutral rating on the company and set a price objective of Rs 7,500 (based on 4.2x FY26E BVPS),” stated the brokerage.
Jefferies reaffirmed a ‘Buy’ rating on Bajaj Finance but reduced its price objective to Rs 7,780 from Rs 9,260 before. Jefferies reported a profit that fell short of Street forecasts. A greater rise in loan charges, reaching 2.3% of average AUM, was a significant disadvantage.
Citi also reduced its Bajaj Finance price objective to Rs 8,275 while maintaining a ‘Buy’ rating on the stock.
Bajaj Finance’s core earnings fell 23 basis points short of the 30-40 basis point range expected for the first half. Furthermore, Citi reported that the credit cost was 2% higher than the guidance of 1.75-1.85%.
Meanwhile, overall expenses increased to Rs 10,839.48 crore in the fourth quarter, up from Rs 7951 crore in the previous year’s equivalent quarter.
Assets under management (AUMs) increased 31% to Rs 3.54 lakh crore in Q1, compared to Rs 2.70 lakh crore in Q1 FY24.
New loans booked increased 10% to 1.09 crore from 0.94 Cr in the June 2023 quarter.
Following the RBI’s removal of limitations on these firms on May 2, 2024, the company started loan sanction and disbursement under ‘eCOM’ and ‘instant EMI Card’, as well as the issuance of EMI cards.
As of June 30, 2024, the company’s customer base reached 88.11 million, a 21% increase from 72.98 million on June 30, 2023. In the first quarter of fiscal year 2025, the customer base grew by 4.47 million.
Net interest income rose by 25% in Q1 FY25 to Rs 8,365 crore from Rs 6,717 crore in Q1 FY24.
Gross NPAs and Net NPAs as of June 30, 2024, were 0.86% and 0.38%, respectively, compared to 0.87% and 0.31% on June 30, 2023. The company’s provisioning coverage ratio for stage 3 assets is 56%.
