Bajaj Finance Share Price Dips After Q2 Report, but Analysts Remain Optimistic

Bajaj Finance Share Price Dips After Q2 Report, but Analysts Remain Optimistic

VoM News Desk | October 18, 2023 | 11:12 AM IST | Breaking News | Follow on Google News

Bajaj Finance Share Price Dips After Q2 Report, but Analysts Remain Optimistic

Bajaj Finance Share Price Dips After Q2 Report, but Analysts Remain Optimistic

On Wednesday, October 18, Bajaj Finance share price experienced a slight dip of over 2% in early trade on the BSE, a day after the company revealed its quarterly performance for the current fiscal’s July-September quarter (Q2FY24). The stock opened at ₹8,080.95, marking a drop from the previous close of ₹8,091.35. It swiftly decreased by 2.05% to reach ₹7,925. By 9:25 am, the stock was down 1.36% at ₹7,981.35.

Underperformance Amidst Challenges

Over the past year, Bajaj Finance’s shares have underperformed the equity benchmark Sensex, with the stock gaining roughly 10%, whereas the Sensex has climbed about 14%.

The company reached its 52-week high of ₹8,190 on October 6 this year and its 52-week low of ₹5,487.25 on March 20. Since the 52-week low, Bajaj Finance’s share price has surged by 47% as of the October 17 close.

Positive Q2 Results Amid Market Fluctuations

After the markets closed on October 17, Bajaj Finance reported a notable 27.7% year-on-year (YoY) growth in its Q2FY24 consolidated net profit, reaching ₹3,550.80 crore in contrast to ₹2,780.65 crore during the same quarter the previous year. The non-banking finance company’s (NBFC) net interest income (NII) on a consolidated basis for Q2FY24 increased by 26% to ₹8,845 crore from ₹7,002 crore YoY.

Expansion and Customer Growth

The company’s assets under management (AUM) also demonstrated impressive growth with a 33% YoY increase to ₹2.9 lakh crore, while interest income exhibited a growth of 38%, reaching ₹11,734 crore. In Q2FY24, Bajaj Finance successfully acquired 35.8 lakh new customers, expanding its total customer base to 7.7 crore as of September 30.

Analysts’ Views and Projections

Brokerage firms have largely maintained their previous views on Bajaj Finance stock following the release of its Q2 results, though some have made adjustments to their estimates. Motilal Oswal Financial Services reiterates its buy call on the stock, setting a target price of ₹9,600, implying a 19% upside. The firm emphasized Bajaj Finance’s strong customer acquisitions and expects continued growth, supported by digital offerings and full-stack payment solutions.

Nirmal Bang has upgraded the stock to a ‘buy’ and raised the target price to ₹9,520, indicating an 18% potential upside. The firm predicts robust AUM growth in FY24 and FY25 and anticipates that the moderation of Bajaj Finance’s net interest margin (NIM) in FY24 will be offset by scale benefits and operating leverage.

Global brokerages have largely maintained their views on Bajaj Finance, with CLSA and Jefferies reiterating buy calls, and Macquarie maintaining an underperform rating due to expensive valuations. Goldman Sachs, meanwhile, has maintained a ‘sell’ call.

Despite market fluctuations, Bajaj Finance’s strong customer base, forays into new segments, and execution track record provide reasons for optimism among analysts.

VoM News Desk

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