The shares of this finance stock, engaged in the business of lending, jumped 6.3 percent after the company announced a 26 percent increase in its net interest income in Q3 FY25.
Price Action
With a market capitalization of Rs 4,92,914.15 crore, Bajaj Finance Limited surged 6.3 percent in Thursday’s trading session and made an intraday high of Rs 8,249.95 per share compared to its previous closing price of Rs 7,758.10 per share.
The stock reiterated from its day’s high and was trading at Rs 7,966 which is 2.7 percent higher than the previous closing price.
What Happened
Bajaj Finance Limited was in focus after the company announced its Q3FY24-25 results. Their interest income went up by 26 percent year on year from Rs 12,523.34 crore to Rs 15,768.21 crore in Q3FY25. On a quarter-on-quarter basis, the interest income increased by 6 percent from Rs 14,987.02 crores.
The company’s net profit rose 18.4 percent from Rs 3,638.95 crore to Rs 4,308.19 crore year on year in Q3 FY25. On a quarter-on-quarter basis, the profits increased 7.3 percent from Rs 4,013.74 crores.
Total expenditure has increased 32.6 percent year on year from Rs 9,273.1 crore to Rs 12,295.92 crore. On a quarterly basis, the total expenditure rose 5 percent from Rs 11697.38 crore.
EPS increased 15.3 percent year on year from Rs 59.42 to Rs 68.53. On a QoQ basis, it increased by 6 percent from Rs 64.56.
Net NPAs (non-performing assets) rose to 0.48 per cent in Q3 FY25, compared to 0.37 per cent in Q3 FY24. The company’s AUM (Assets Under Management) has gone up 28 percent to Rs 3,98,043 crore.
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Broker Upgrades
Jefferies has issued a ‘Buy’ recommendation with an upside of 16.4 percent and a target price of Rs 9,270 per share. According to Jefferies, asset quality trends are stabilizing, and management anticipates a reduction in credit costs starting from Q4FY25.
Morgan Stanley has reiterated its ‘Overweight’ rating on Bajaj Finance, increasing the target price to Rs 9,300 per share. The management has guided lower credit costs for the upcoming quarter and they expect over 25 percent EPS growth in FY26, depending on macroeconomic factors.
Company Overview
Bajaj Finance started as a vehicle financing company and has since transformed into one of the largest and most diversified NBFCs in the country. It provides diversified lending services in retail, SME as well as commercial sectors with strong footprints in both urban and rural India.
In addition to lending, its products include accepting public and corporate deposits and UPI, FASTag and Merchant QR payments.Their customer base has increased to 5.03 MM as of Q3 FY25. The company has entered 14 new geographical locations, bringing the total number of areas to 4,259.
Written by Shwetha Sairam
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