Bajaj Finance shares fell over 4 per cent in early trade today despite the non-banking finance company (NBFC) reporting a 53 per cent rise in Q2 profit. Investors booked profit in the stock today which seems to have already discounted the positive stance of brokerages for Q2 earnings.
Analysts and brokerages had forecasted the firm to post a healthy set of numbers for the quarter ended September.The stock rose over 3% ahead of Q2 earnings on October 26.
Bajaj Finance stock touched an intraday low of Rs 7,484 today, falling 4.65 per cent against the previous close of Rs 7,849 on the Bombay Stock Exchange (BSE).
The large cap stock is trading higher than 50 day, 100 day and 200 day moving averages but lower than 5 day and 20 day moving averages.
Bajaj Finance shares have gained 120 per cent in one year and risen 43.87 per cent since the beginning of this year.
Total 0.41 lakh shares of the firm changed hands amounting to turnover of Rs 31.05 crore.
Market cap of the firm fell to Rs 4.54 lakh crore on BSE. The stock hit 52-week high of Rs 8,020 on October 18, 2021 and 52-week low of Rs 3,255 on October 30, 2020.
The NBFC reported a 53 per cent rise in net profit at Rs 1,481 crore in Q2 against net profit of Rs 965 crore in the same quarter of the previous fiscal.
Total income climbed 19 per cent to Rs 7,732 crore during the July-September quarter against Rs 6,520 crore in the same quarter of FY21.
Interest income rose 16 per cent to Rs 6,687 crore from Rs 5,763 crore.
Motilal Oswal has maintained a buy call on Bajaj Finance stock with a target price of Rs 8,650 post Q2 earnings.
"Barring any new COVID-19 disruption, we expect Bajaj Finance to deliver 24 per cent AUM growth in FY22E and a 25 per cent CAGR thereafter. We have marginally increased our credit cost estimates for FY22E to 2.8 per cent (v/s 2.6 per cent earlier). We estimate 4.4-4.7 per cent return on assets/ 21-23 per cent return on equity over FY23-FY24E," said the brokerage in its Q2 earnings review.
"Given our expected recovery in asset quality in the second half of FY22 and the sustained milestones-driven progress made by Bajaj Finance in the digital transformation program, we maintain BUY with a target price of Rs 8,650," it added.
Morgan Stanley said earnings momentum is set to pick up significantly.
"Bajaj Finance has three P's -- profits, platform, and payments -- that excite investors in 'new age stocks'. Valuation is not cheap, but stocks seldom pause against such a backdrop. The brokerage has an overweight stance on the stock and raised target price to Rs 9,060," said Morgan Stanley in its earnings review.
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