Bajaj Finance’s Remarkable Performance Propels Shares Toward ₹5 Lakh Crore Club

Bajaj Finance's Remarkable Performance Propels Shares Toward ₹5 Lakh Crore Club

VoM News Desk | October 11, 2023 | 05:46 PM IST | Breaking News | Follow on Google News

Bajaj Finance’s Remarkable Performance Propels Shares Toward ₹5 Lakh Crore Club

Bajaj Finance’s Remarkable Performance Propels Shares Toward ₹5 Lakh Crore Club

Bajaj Finance, a leading Indian non-banking financial company (NBFC), has been making impressive strides on Dalal Street since April, marking a 45.5% gain. On October 6, the company’s shares soared by 4.35%, reaching a historic high of ₹8,192.

With this stellar performance, Bajaj Finance’s shares are just 1.63% shy of entering the elite ₹5 lakh crore market capitalization club. At its peak, the company’s market capitalization had already hit ₹4,95,124 crore.

Climbing the Valuation Ladder and Long-Term Success

Presently, Bajaj Finance boasts a market capitalization of ₹4,91,966 crore, securing the 10th spot among India’s most valued listed firms, as per exchange data. In terms of long-term performance, Bajaj Finance shares have delivered an astounding return of 5920% over the last decade. On October 5, the company’s board approved a capital infusion of ₹8,800 crore by selling shares to institutional investors and ₹1,200 crore through convertible warrants to promoter Bajaj Finserv. In its Q2FY24 business update, new loans booked surged by 26% to ₹8.53 million compared to ₹6.76 million in Q2FY23. Assets under management (AUM) increased by 33% to approximately ₹2,90,200 crore as of September 30, 2023, compared to ₹2,18,366 crore as of September 30, 2022. Deposits registered a 39% YoY growth, reaching ₹548 billion, and the consolidated net liquidity surplus amounted to approximately ₹11,400 crore as of September 30, 2023. The customer franchise expanded to 76.6 million by the end of Q2 FY24, up from 62.9 million in Q2 FY23, with 3.6 million customers added during the quarter and 7.4 million in H1FY24.

Positive Ratings and Future Prospects

Domestic brokerage firm BoB Capital Markets maintains a bullish stance on Bajaj Finance, citing robust AUM growth, a diverse business model, efficient execution, and a seasoned leadership team as factors that will enable the company to thrive amidst growing competition and manage asset quality risks in new ventures such as microfinance. The brokerage has assigned a target price of ₹9,105 per share, backed by a ‘buy’ rating. This target is based on a standalone business valuation of 6.6x FY25E ABV (₹8,619/share), a 20% premium to the long-term average, with additional contributions from the housing arm BHFL (2x FY25E BV) and the securities subsidiary BFSL (15x FY25E EPS).

VoM News Desk

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