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Bajaj Finance Share Price Hits Record High on Robust Q2 Earnings and Outlook

Bajaj Finance, one of India’s leading non-banking financial companies (NBFCs), saw its share price hit a record high of Rs 7,406.80 on Wednesday, December 1, 2023, on the National Stock Exchange (NSE). The stock gained 2.03% on the day, outperforming the Nifty Bank index, which fell 0.29%. The stock also outperformed the broader Nifty 50 index, which rose 0.45%. The stock’s market capitalization stood at Rs 4.48 trillion, making it the sixth most valuable company in India.

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The stock’s rally was driven by its strong quarterly results for the second quarter of fiscal year 2024, which ended on September 30, 2023. The company reported a 51.11% year-on-year increase in its net profit to Rs 168.11 billion, beating analysts’ estimates. The company’s revenue also grew by 132.44% year-on-year to Rs 630.05 billion, driven by robust growth in its net interest income, non-interest income, and other income. The company’s net interest margin, a key measure of profitability, improved to 4.1% from 3.9% a year ago. The company’s asset quality also improved, as its gross non-performing assets ratio declined to 1.08% from 1.37% a year ago.

The company also announced a dividend of Rs 5 per share for the second quarter, which will be paid on December 15, 2023, to the shareholders on record as of December 8, 2023. The dividend payout ratio, which indicates the percentage of earnings distributed as dividends, was 23.79%, which is in line with the company’s policy of maintaining a payout ratio of 20-25%.

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The company also provided a positive outlook for the third quarter and the full year, citing strong demand and recovery in its core segments, such as consumer, rural, and SME lending. The company said it expects to grow its assets under management (AUM) by 25-30% year-on-year in the third quarter, and by 30-35% year-on-year in the full year. The company also said it expects to maintain its net interest margin at 4-4.2% for the full year, and its return on equity (ROE) at 20-22% for the full year.

The company’s share price has gained 6.27% in the past month, outperforming the Nifty Bank index, which has gained 4.88% in the same period. The company’s share price has also outperformed the broader Nifty 50 index, which has gained 3.74% in the past month. The company’s share price has been supported by its consistent growth, strong fundamentals, and diversified business model. The company has a dominant position in the retail lending segment, with a market share of 26.6% in retail loans and 28.3% in retail deposits as of September 30, 2023. The company also has a strong presence in the corporate lending, treasury, and wholesale lending segments, which provide a balanced revenue mix.

The company’s share price has a consensus target price of Rs 7,714.65, which implies a potential upside of 4.16% from the current level. The company has received 39 analyst ratings, of which 32 are buy, four are outperform, three are hold, and none are underperform or sell. The company’s share price has a 52-week high of Rs 8,192.00 and a 52-week low of Rs 5,485.70.

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