Bajaj Finance Share Price Tumbles But Brokerages Say Don't Sell

Bajaj Finance’s share price plunged on Tuesday after the non-banking finance company posted weaker-than-expected third quarter results.

What Happened: Bajaj Finance posted a consolidated net profit of ₹3,639 crore, marking a 22% growth from the previous year thanks to increased net interest income and improved asset quality. However, the figure fell short of market expectations.

Total net income for Bajaj Finance rose 25% to ₹9,298 crore in the quarter, slightly missing growth expectations. Net interest income during the quarter increased by 29% to ₹7,655 crore, and the number of new loans booked grew 26% to 98.6 lakh.

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What Analysts Say: Bajaj Finance reported Q3 earnings below market estimates for the quarter but analysts remain optimistic about the stock, saying the company’s performance, marked by slight challenges like increased loan losses, was within the guided range. Looking ahead, stable asset quality and robust growth in assets under management (AUM) are expected to drive earnings.

Despite the Q3 earnings missing estimates, HSBC and Nomura maintain a “buy” rating on Bajaj Finance. HSBC set a target price of ₹8,900 per share, acknowledging reduced fees and increased credit costs but expressing confidence in the company’s active strategy.

Nomura, with a target price of ₹8,800 per share, highlighted that Q3 results were in line with expectations, noting strong growth in assets under management and robust pre-provision operating profit growth.

Jefferies was also bullish on Bajaj Finance, issuing a “buy” call with a target price of ₹9,400 per share. Despite asset quality disappointment due to personal loan slippage, the report emphasized strong AUM growth and improved net interest margins contributing to higher net interest income.

Price Action: Bajaj Finance’s share price was down 4.03% at ₹6,901.90 near the start of trade on Tuesday.

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