The shares of this diversified non-banking finance company fell up to 6 percent after the international brokerage citi downgraded to ‘neutral’ as the company reported Q4 Results.
Price Movement
With a market capitalization of Rs 5.34 lakh crore, the shares of Bajaj Finance Ltd were trading at Rs 8,602.75 per share, decreasing around 5.35 percent as compared to the previous closing price of Rs 9,089.30 apiece.
Matter explanation
The shares of Bajaj Finance Ltd have seen bearish movement even after reporting positive results in Q4FY25, Revenue increased by 2.3 percent on a quarter-on-quarter basis from Rs 18,035 crore in Q3FY25 to Rs 18,457 crore in Q4FY25. Further, revenue zoomed by 23 percent year on year, from Rs 14,926 crore in Q4FY24 to Rs 18,457 crore in Q4FY25.
The company’s net profit increased by 6 percent on a quarter-on-quarter basis, from Rs. 4,308 crore in Q3FY25 to Rs. 4,546 crore in Q4FY25. Further, net profit magnified significantly by 18 percent year on year from Rs 3,825 crore in Q4FY24 to Rs 4,546 crore in Q4FY25.
The company posted a strong FY24- 25 performance, with revenue surging 27 percent from Rs 54,972 crore to Rs 69,684 crore. Net profit jumped 16 percent, from Rs 14,451 crore to Rs 16,779 crore, reflecting robust growth and improved profitability over the previous financial year.
Furthermore, the company approved a stock split, subdividing 1 paid-up equity share of Rs 2 into two shares of Rs 1 each. Additionally, it recommended issuing bonus shares in a 4:1 ratio, granting 4 bonus equity shares of Rs 1 each for every 1 fully paid-up equity share of Rs 1.
Moreover, the Board of Directors has declared a Special Interim Dividend of Rs 12 per equity share (600 percent of the Rs 2 face value) for the financial year ended 31 March 2025, rewarding shareholders with a significant distribution.
Brokerage recommendations
Citi, one of the well-known brokerages globally, has downgraded this NBFC stock to a ‘neutral’ and reduced the target price to Rs 9,830 apiece from Rs 10,200 per share, still indicating a potential upside of 14 percent from Wednesday’s price of Rs 8,604.05 per share.
Also read: 5 Stocks to buy now for an upside potential of up to 31%; Do you own it?
Market Outlook
Management expects 25 percent consolidated balance sheet growth and 22–23 percent profit growth in the next fiscal year. While remaining cautious due to macroeconomic headwinds, they aim to leverage strong capital and customer base, prioritizing margin maintenance and risk discipline without compromising profitability amidst potential credit cost pressures.
Management Comment
Bajaj Finance expects strong FY26 performance, targeting 14–16 million new customers and 24–25 percent AUM growth. NIM is expected to remain stable, with improved Opex and fee income. Profitability, ROA (4.4–4.6 percent), ROE (19–20 percent), and AI adoption across functions will drive future efficiency and growth.
Geographic presence
As of 31 March 2025, Bajaj Finance’s geographic presence reached 4,263 locations, including 1,582 urban and 2,681 rural lending points. The company added only 4 new locations in Q4 FY25, indicating a slowdown after rapid expansion in prior quarters and years.
Company Profile
Bajaj Finance Ltd. is engaged in lending and accepting deposits. It has a diversified lending portfolio across retail, small and medium-sized enterprises (SMEs), and commercial customers with a presence in both urban and rural India.
Written by Abhishek Singh
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
