Shares of Bajaj Finance on Monday climbed 4% on Wednesday’s early trades after the company gave its business update for the quarter that ended 31 March 2023 (Q4 FY23).
At 11:28 AM, they were trading at ₹ 5775.10 apiece, up 1.10%, however, they reached an intraday high of ₹ 5,947.05, indicating an increase of 4.06% as compared to Monday’s closing price of ₹ 5715.05 apiece.
Business Update
The company informed the bourses that on a consolidated basis, it booked new loans worth 7.6 million in Q4 FY23, as compared to 6.3 million in the corresponding quarter last year Q4 FY22, indicating an increase of 20%.
The NBFC’s assets under management (AUM) grew by 29% to approximately ₹ 247,350 crores as of 31 March 2023 (AUM excluding short-term IPO financing receivable of ₹ 5,365 crore), as compared to ₹ 192,087 crores as of 31 March 2022.
Bajaj Finance added that it continues to remain well capitalized with a capital adequacy ratio (CRAR) of approximately 24.9% as of 31 March 2023. Its deposit book stood at ₹ 44,650 crores with a capital adequacy ratio (CRAR) of approximately 24.9% as of 31 March 2023.
Target
Morgan Stanley has an ‘overweight’ stance on the shares of Bajaj Finance with a target price of ₹ 8,000 per share, representing an upside of 38.53% as compared to its current share price of ₹ 5775.10.
According to the global brokerage and research firm, competitive intensity in mortgages has eased relative to the third quarter and growth has picked up. The company’s B2B sales finance business has also picked up after slowing post-festive season.
Bajaj Finance is a large-cap company with a market capitalization of ₹3,45,369 crores. It has an ideal return on equity of 17.43% and a dividend yield of 0.35%. The company’s shares were trading at a price-to-earnings ratio of 32.22, which is significantly higher than the industry P/E of 25.54, indicating that the stock might be overvalued or that investors are willing to pay a higher price for its earnings.
Written by Simran Bafna
