Bajaj Finance Shares Slip Over 1% After Q1 Update, But Analysts Remain Bullish

Shares of Bajaj Finance gave up early gains to trade slightly lower on Thursday despite posting a solid first-quarter business update.

What Happened: The non-banking financial company (NBFC) reported a robust 31% year-on-year increase in assets under management (AUM), reaching ₹3.5 lakh crore for the quarter ended June, compared with ₹2.7 lakh crore in the same quarter last year.

New loans booked during the quarter also saw a 10% increase to 1.09 crore compared to 99 lakh in Q1FY24.

Additionally, the NBFC’s deposit book grew 26% to ₹62,750 crore in the first quarter. The management reported a consolidated net liquidity surplus of nearly ₹16,200 crore.

The company’s customer franchise expanded significantly, rising to 8.81 crore from 7.3 crore as of June 30, 2023 — an increase of over 1.5 crore.

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Restarting Businesses: Bajaj Finance said it resumed sanctioning and disbursing loans under its “eCOM” and “Insta EMI Card” programs after the Reserve Bank of India (RBI) lifted restrictions on these businesses on May 2.

The company also raised around ₹10,000 crore through qualified institutional placement (QIP) and preferential allotment, which can support growth through FY26, according to analysts.

Analyst Views: Brokerage JPMorgan maintained an “overweight” rating on Bajaj Finance following the update, with a target price of ₹8,500. The research firm said the NBFC’s growth has accelerated after the lifting of the RBI ban.

Customer additions stood at 44.7 lakh, which was the highest ever, placing the company in favourable stead to beat its full year’s guidance of 1.2 to 1.4 crore additions, the brokerage said. It also added that Bajaj Finance’s first-quarter operating metrics are likely to continue to stand out among large-cap financials.

InCred Equities analysts were also upbeat on Bajaj Finance’s aggressive customer acquisition strategy and successful diversification into new business segments, saying it has confidence in the company’s management stability and its ability to maintain diversified growth momentum. The brokerage retained its “add” rating on Bajaj Finance with a target price of ₹9,000.

Price Action: Bajaj Finance’s share price was down 1.29% at ₹7,164.90 despite opening in the black on Thursday. The stock has eased 1.84% so far this year.

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