Bajaj Finance shares fell 14% in a month: Target price, valuation, financials and more

Shares of NBFC Bajaj Finance Ltd have lost 14% in the last one month. Of this, the large cap stock is down 8.5% after Q3 earnings were announced on January 29.

On the other hand, the benchmark Sensex is down 2.06% in a month. The stock is trading below the 5 day, 10 day, 20 day, 30 day, 50 day, 100 day, 150 day and 200 day moving averages. This signals the NBFC stock is trading in bearish range.

Bajaj Finance investors could earn a marginal return of 2.18% in the last one year. Otherwise, the stock delivered negative returns in time periods (one week, YTD, three months, six months and two years) up to three years. It could manage returns of 18% in three years.

The company has a price to book ratio of 7.47. The PE of the company stands at 29.45 against the industry estimate of 31.33.

The stock hit an all-time of Rs 8190 on October 6, 2023. Since then, the stock has lost 20% till date

In the previous session, the Bajaj Finance stock closed 1.19% lower at Rs 6575.60 on BSE. Market cap of Bajaj Finance slipped to Rs 4.06 lakh crore.

Total 0.73 lakh shares of the firm changed hands amounting to a turnover of Rs 47.91 crore on Monday.

Bajaj Finance's relative strength index (RSI) stands at 33.2 which signals the stock is neither oversold nor overbought. A level below 30 is defined as oversold while a value above 70 is considered overbought. Bajaj Finance stock has a one-year beta of 0.5, indicating low volatility during the period.

Brokerage KR Choksey has maintained its buy call but lowered its target price post Q3 earnings.

“We assign a price to adjusted book value multiple of 4.8 times on FY26 estimates adjusted book value of Rs 1,792.4 (earlier 6.2 times  FY25E ABV to arrive at a target price of Rs 8,600 per share (earlier Rs 9,475). Accordingly, we maintain our ‘BUY’ rating on BAF shares,” said KR Choksey.

JM  Financial expects the stock to hit the target of Rs 10,000 . It expects easing of regulatory restrictions for the NBFC, which can spur a rally in the stock.

"We believe that despite minor inch up in credit costs in 3QFY24, Bajaj Finance remains the best play on diversified consumption opportunity with strong risk mechanisms, high growth and superior return ratios. We see Bajaj Finance, being a strong incumbent with long-standing credible track record in consumer lending, only emerging stronger as the concerns around unsecured loans settle over the next 2-3 quarters. BAF's current valuations at 23 time FY25e are attractive given its strong RoA/RoE profile and ability to growth across cycles," JM Financial said.

Bajaj Finance reported a 22% rise in its consolidated net profit for the quarter ended December 2023. Net profit climbed to Rs 3,639 crore in the last quarter against Rs 2,973 crore profit in the year ago period.

Net interest income in Q3 climbed 29% to Rs 7,655 crore from Rs 5,922 crore in the same period of last year.

Total income climbed 25% year-on-year to Rs 9,298 crore in the October-December period against Rs 7,438 crore in the corresponding period of last year.

The NBFC’s loan losses and provisions in the third quarter climbed to Rs 1,248 crore as against Rs 841 crore in the year ago quarter.

 

 

 

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