Bajaj Finance shares continued their bull run for the second consecutive trading session on Wednesday, opening at ₹5,832 apiece, which is higher than their previous closing value of ₹5,715. During the early hours of trading, the shares surged further to ₹5,947, up by 4%.
This comes in response to the company's announcement of a 20% YoY increase in loans booked during the January-March quarter (Q4) of FY23, taking the total loans booked by the lender in the financial year (FY23) to 29.6 million, its highest ever in a year.
The company's customer franchise also witnessed a significant rise, with the number of customers increasing from 57.6 million in Q4 FY22 to 69.1 million in Q4 FY23, registering an increase of 11.5 million, the company said in an exchange filing.
The core AUM grew by 29% to ₹2,47,350 crore in Q4 FY23, and the consolidated net liquidity surplus stood at nearly ₹11,850 crore.
"The company continues to remain well capitalized, with capital adequacy ratio (CRAR) of approximately 24.9% as of March 31, 2023. The deposit book stood at approximately ₹44,650 crore as of March 31, 2023, as compared to ₹30,800 crore as of March 31, 2022, a YoY growth of 45%," said Bajaj Finance.
On January 27, the company reported a 40% jump in its consolidated net profit to ₹2,973 crore for Q3 FY23, driven by a fall in provisions and an increase in net interest income. The company had posted a net profit of ₹2,125.3 crore in the corresponding quarter of last year.
The total revenue from operations came in at ₹10,786 crore in Q3FY23, a growth of 26.37% compared to ₹8,535.1 crore in the year-ago quarter. The net interest income of the non-banking lender rose by 28% YoY to ₹7,435 crore in the December quarter.
Following the company's Q3 performance, brokerage firm Axis Securities upgraded its rating on the stock to "buy" from "hold," with a revised target price of ₹7,400 apiece from ₹8,600 earlier.
Axis Securities raised its earnings estimates by 1-2% for FY23–25E to reflect the improving operational profitability driven by operating leverage emerging and muted credit cost trends. It expects the company to deliver a healthy earnings growth of 23% CAGR over FY23–25E.
On similar lines, another brokerage firm, ICICI Securities, also maintained a "buy" call on the stock with a revised target price of ₹7,250 apiece from an earlier price of ₹8,650.
HDFC Securities also upgraded the stock to "ADD" with a revised target price of ₹6,700 apiece from an earlier price of ₹7,314. The brokerage said its reduced stance on BAF was largely centered on a downside risk to growth and an expensive valuation.
30 analysts polled by MintGenie on an average have a 'buy' call on the stock.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.
