It was a great day for Bajaj Finance on Thursday, with a 3% increase in its share price. The reason behind this was the increase in profits and net interest income (NII) reported by NBFC, which led to positive commentary from brokers. Despite the rising interest rate environment, Bajaj Finance saw a nearly 30% increase in its income, while returns on assets (ROA) remained above 5% in the fifth quarter in a row. JP Morgan stated that Bajaj Finance correctly values premium valuation on private banks and suggested a target of Rs 9,000 for the stock. Morgan Stanley received a share of Rs 8,000.
In March, NBFC reported a profit of Rs 3,158 crores, a growth of 30% over the previous year. They also stated that their Net Interest Income (NII) had increased by 28% to Rs 7,771 crores for the quarter. Bajaj Finance claims that they have achieved a growth of Rs 16,537 crores in their core assets under management in the March quarter, and during the fiscal year, Bajaj Finserv’s franchise has attracted 30.90 lakh, new customers. All their services and product-related details are now available on their digital platform, including the web and app, and their app has 3.55 crore pure users.
Bajaj Finserv provided a 4-7% beat on their NII, free provision operating profit, and profit after tax. Their performance and commentary have also tried to address all concerns related to competition in the B2B business and weakness in the housing portfolio.
Bajaj Finance is currently trading at its seven-year average one-year rolling forward value, which is 5.6 times the adjusted book value. With an expected Annualized Unique Monthly Active Gross Register (AUMCGR) of 25% and an average 4.7%/23.7% ROE/ROI delivery in the fiscal year 2023-25, brokers have reiterated their buy rating on the stock with a 12-month target price of 7,865 rupees.
