According to the PIB, India’s financial sector is a dynamic and rapidly growing segment of the economy, projected to reach a market volume of USD 480 billion by 2029. The banking industry plays a crucial role, with loans constituting over 50% of the total assets of major banks. Additionally, the fintech market is expected to reach USD 150 billion by 2025.
With a market capitalization of Rs 2.65 lakh crore, the shares of Bajaj Finserv Ltd were trading at Rs 1,665.60 per share, decreasing around 0.81 percent as compared to the previous closing price of Rs 1,679.15 apiece.
Matter explanation:-
Bajaj Finserv Ltd gave a wide range of guidance for five years in which the company aims to reach ₹3 lakh crore in total income by 2028-29 financial year, up from ₹1.1 lakh crore in FY24. It has set the target at ₹20,000 crore for profit after tax (PAT) for the next five years.
Moreover, the business also intends to grow its client franchise from 9.2 crore in the first half of FY25 to about 13 to 14 crore by FY28 and 19 to 20 crore by FY29. It also intends to increase cross-sell franchises from 5.77 crore in the first half of FY25 to 8-9 crore by FY28 and 11.5-12.5 crore by FY29.
Furthermore, Bajaj Finserv India’s payments gross merchandise value (GMV) grew by 0.27% in the first half of fiscal year 25. It plans to attain 1.25%-1.5% in FY28 and 0.4%-0.5% in FY29. The NBFC also plans to increase its retail credit share to 3.8%-4% in FY28 and 3.8%-4.2% in FY29, up from 2.67% in H1FY25. It forecasts its total credit to expand from 2.11% in H1FY25 to 3%-3.25% in FY28 and 3.2%-3.5% in FY29.
Additionally, the company targets a return on equity of 19.4% by FY28 and 20%-22% by FY29. It also aims to increase assets under management per cross-sell to ₹90,000-₹95,000 by FY28 and ₹80,000-₹85,000 by FY29, up from ₹64,800 in H1FY25.
Financial performance:-
Examine the company’s financial condition, revenue zoomed by 29 percent from Rs 26,023 crore in Q2FY24 to Rs 33,704 crore in Q2FY25, and during the same time frame, net profit magnified by 11 percent from Rs 3,756 crore to Rs 4,180 crore.
Insurance Operations:-
Bajaj Allianz General Insurance reported a 20% decline in gross written premium due to a spillover of government health business, but core business grew 11%, outperforming industry growth. Profit after tax rose 6% QoQ to Rs 494 crores, with a strong solvency margin of 312%.
Bajaj Allianz Life Insurance saw a 34% YoY growth in individual-rated new business and a 23% rise in gross written premium. AUM increased 25% to Rs 123,178 crores, though new business margins declined due to higher ULIP sales.
Emerging Businesses:-
Bajaj Finserv’s emerging businesses saw robust growth: stock broking revenue rose 78% to ₹121 crores, Bajaj Finserv Direct grew 30% but posted a ₹6 crore loss, and Bajaj Finserv Health reported ₹233 crores in revenue with a ₹32 crore loss, reflecting ongoing growth investments.
Market Dynamic:-
Management prioritized risk management and underwriting profit over GDPI growth amid industry margin pressures from increased sales of lower-margin products like ULIPs. Discussions on potential third-party price hikes are ongoing, with the regulator evaluating adjustments to address the evolving market dynamics.
Future Outlook:-
Bajaj Finserv sees strong growth prospects for its Direct and health business post-Vidal Health acquisition. Management aims to sustain market leadership in life and general insurance, despite challenges, by investing surplus capital in mutual fund and healthcare ventures, driving growth and innovation.
Company Snapshot:-
Bajaj Finserv Ltd. serves millions of customers by providing solutions for asset acquisition through financing, asset protection through general insurance, family and income protection in the form of life and health insurance, and retirement and savings solutions.
Written by:- Abhishek Singh
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