It is anticipated that the non-banking loan company Bajaj Finance loan’s share price will rise by 26–28 percent in the debt ceiling year that starts on April 1, 2024, in terms of assets under management. It is anticipated that this growth would exceed the 34 percent rise that investopedia.com saw in the previous year.
Friday’s trading saw a dramatic decline in the share price of Bajaj Finance Ltd due to worries over the shadow lender’s growing profits. The stock dropped 7.78% from its previous closing of Rs 7,293.90 to a daily low of Rs 6,728.
In contrast to the 34% growth the previous year, the non-banking finance company predicts that its assets under Dow Jones will increase by between 26% and 28% in the fiscal year that started on April 1, 2024. Over the following two quarters, the NBFC predicted that its net interest margin will decrease by 30 to 40 basis points (bps).
Bajaj Finance
According to investopedia.com, Bajaj Finance announced a 21% increase in earnings for the fourth quarter (Q4 FY24), but stated that it is “cautiously optimistic” about the profit growth for FY25, which may be somewhat “laggy.”
Bajaj Finance also pulled shares of its holding company, Bajaj Finserv Ltd., down by 4% at investopedia.com in what may be considered a “rub-off” impact. Best high-yield savings accounts (investopedia.com/4770633)
opinions from intermediaries
Brokerage Emkay stated that the Reserve Bank of India (RBI) restriction on EMI and e-com cards, which reduced PBT by about 4% at investopedia.com, was the reason Bajaj Finance reported strong debt ceiling numbers in Q4FY24.
All things considered, our mortgage rates indicate that the business is effectively approaching its long-term strategic objectives. He said at investopedia.com, “We are marginally modifying our forecasts to reflect Q4 developments and management guidance, resulting in a PAT adjustment of about 3 percent to 1 percent in FY25E–27E. We reaffirm our ‘Buy’ rating with an unchanged Mar–25E price objective of Rs 9,000 per share.
Religare Broking reports that the NBFC’s robust increase in AUM (Asset Under Management) was driven by the secured loans business. But the margin kept becoming smaller.
The cost of funds increased by 10 basis points QoQ and 47 basis points YoY to 7.9 percent, which was the main cause of the margin drop. The management projects that by H1 FY25, margins will have decreased by 30–40 basis points (bps). The proportion of secured loans in the company’s portfolio is increasing, he stated.
Management anticipates that credit quality will be steady and that the RBI will lift the credit limit on cards. In terms of finances, we anticipate that over FY24–26E, NII/PPOP/PAT will decline at a CAGR of 26%/24%/25%. maintain your buy position with a price target of Rs 8,861 and be enthusiastic about Bajaj Finance,” said Religare.
