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Bajaj Finance hits 52-week high on strong Q1 update

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Bajaj Finance shares rose nearly 8%, on Tuesday, and hit its 52-week-high of Rs 7,917 on BSE, after the company reported a strong business update for the quarter ended June 30. The stock closed 7.71% up at Rs 7,861.

The company’s assets under management grew by 32% to approximately Rs 2.7 trillion as of June 30 from Rs 2.4 trillion in the corresponding quarter of the previous year. The firm recorded the highest ever quarterly increase in its AUM of approximately Rs 22,700 crore in Q1FY24.

Its customer franchise rose to 72.98 million from 60.30 million on year, and posted its highest ever quarterly increase of 3.84 million in Q1.

Brokerage firm CLSA has upgraded the stock from ‘outperform’ to ‘buy’ with a price target of Rs 9,000. “Given the company’s delivery on customer additions, loan booked and loan growth, we now think the company can deliver a 28%-30% loan CAGR over the next two years”, said the CLSA report.

The deposit book of Bajaj Finance has increased 46% to approximately Rs 49,900 crore from Rs 34,102 crore in the year-ago period. New loans booked during Q1 grew 34%.

According to Sharmila Joshi, an independent investment advisor, economic conditions like pause in interest rate hike and the arrival of monsoon have been favourable for the upward rally of stock as well as the NBFC sector.

The company said its liquidity position remains strong with consolidated net liquidity surplus at Rs 12,700 crore as of June 30. While CLSA expected AUM to grow 6-7% quarter on quarter, the company delivered 9%, taking the year-on-year rise to 32%. This is extraordinary for an NBFC of its size, said the report.

Motilal Oswal has also given a ‘buy’ rating for the stock, citing strong loan growth and renewed traction in deposits. Morgan Stanley remained ‘overweight’ on the stock and raised the target price to Rs 9,250 per share.

“Bajaj Finance has taken an impulse move from the low of 6,954 to 7,920. Currently, the stock is in northward rally and is approaching its lifetime high. Traders should ride the momentum with trailing stoploss of 7,770”, said Kavita Jain, senior research analyst, Arihant Capital Markets.

The stock has gained nearly 12% in five trading sessions and 20% this year. The market capitalisation of Bajaj Finance stands at Rs 4.76 trillion.



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