The Indian stock market has declined for nine consecutive sessions with the Nifty 50 facing major losses. The Nifty 50 hit a low of 22,725, while the BSE Sensex fell to 75,294, losing over 3,000 points. This was impacted by economic uncertainty, weak earnings, high valuations, FII selling, and global factors such as gold price movements.
Even during such a period, Bajaj Finance and Bajaj Finserv have seen over 20 percent upside. Here’s why.
With a market capitalization of Rs 5.22 Lakh crore Bajaj Finance Limited is primarily engaged in the business of lending to retail, SME, and commercial customers. So far this year, the stock has managed to generate a return of 21.5 percent.
Bajaj Finserv Limited, the financial services arm of the Bajaj group has a market capitalization of Rs 3.2 Lakh crore. The company has given over 20 percent returns this year.
Financial Performance
The financial performance of both companies has been consistently strong with Bajaj Finance reporting a 3-year CAGR of 27 percent in revenue growth and 48.4 percent in net profit growth. Similarly, Bajaj Finserv has shown a 3-year CAGR of 22 percent in revenue growth and 28 percent in net profit growth.
Management Outlook
For FY26 Bajaj Finance is expected to have an AUM growth of ~ 25 percent, credit costs less than 2 percent and profit after tax (PAT) growth of ~ 22-23 percent, contingent on a stable external environment. Credit costs had peaked in the previous quarter and are expected to decline, as a result the company can focus on expanding its loan book.
Bajaj Finserv Ltd has outlined an ambitious five-year growth plan, aiming to achieve a total income of Rs 3 lakh crore by the 2028-29 financial year, a significant rise from Rs 1.1 lakh crore in FY24. The company has also set a profit after tax (PAT) target of Rs 20,000 crore over the same period.
Strategic Partnerships
Bajaj Finance has recently tied up with Bharti Airtel, a major telecom company, to tap into its customer base. Since there are 200 million Airtel users who are not yet Bajaj Finance customers, this partnership creates a massive opportunity for the company to cross-sell financial products like loans, credit cards, and insurance.
Targets
Renowned broker Sharekhan has given an upside potential of 12.74 percent for Bajaj Finance with a target price of Rs 9500.
Bajaj Finserv has also received a Buy call from Sharekhan with an upside potential of 24.02 percent and a target price of Rs 2350.
Written by Shwetha Sairam
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