Bajaj Finance Ltd has seen a notable rise in its share price, climbing by ₹87.50 or 0.99% to reach ₹8,950.00 in early trading on May 5, 2025. This increase comes as the company approaches the psychological ₹9,000 mark, driven by renewed buying interest in high-quality non-banking financial companies (NBFCs) amidst a stable macroeconomic environment and growing credit optimism.
As of 9:58 AM IST on the same day, Bajaj Finance's stock performance was as follows: the current price stood at ₹8,950.00, with a previous close of ₹8,862.50 and an opening price of ₹8,877.50. The day’s trading saw a high of ₹8,959.00 and a low of ₹8,866.00. With a market capitalization of ₹5.55 lakh crore, a price-to-earnings (P/E) ratio of 33.37, and a dividend yield of 0.49%, the stock is positioned well within its 52-week range of ₹6,375.70 to ₹9,660.00.
The upward momentum in Bajaj Finance's stock can be attributed to several key factors. Firstly, there is sector-wide optimism regarding the NBFCs, particularly in relation to improving demand for rural and retail lending. Secondly, the company's robust fundamentals, characterized by strong asset quality and consistent earnings, have bolstered investor confidence. Additionally, reclaiming the ₹8,900+ zone has triggered further buying interest among traders.
Market analysts are closely monitoring the technical indicators for Bajaj Finance. Support levels are identified at ₹8,910 and ₹8,850, while resistance levels are set at ₹9,000 and ₹9,080. The short-term bias appears bullish, with a fresh breakout above ₹9,000 potentially paving the way for a move towards ₹9,150 or higher. Momentum traders are particularly focused on sustaining a close above ₹9,000 to validate the short-term breakout potential.
Looking ahead, investors are keen to see the company's Q4 earnings report and management's commentary on the fiscal year 2026 outlook. Key areas of interest include trends in consumer durable and personal loan book growth, guidance from the Reserve Bank of India (RBI) on NBFC regulations, and performance metrics from peers such as Bajaj Finserv, Muthoot, and Manappuram.
In addition to its stock performance, Bajaj Finance has also raised its fixed deposit (FD) rates, now offering senior citizens an attractive interest rate of up to 8.60% per annum for a 44-month tenure. This initiative is expected to attract more investors and further enhance the company’s financial standing.
On the financial performance front, Bajaj Finance reported a net profit of ₹45.5 billion for the recent quarter, reflecting a 19% year-on-year increase and a 6% quarter-on-quarter rise. However, this figure was approximately 2% lower than the estimates from JM Financial, primarily due to a higher credit cost of around 2.3%. This credit cost was influenced by a one-time additional provision of approximately ₹3.6 billion aimed at strengthening expected credit loss (ECL) coverage. Adjusting for this provision, the underlying credit costs would have been around 1.9%.
Asset Under Management (AUM) growth was healthy at approximately 26% year-on-year and 5% quarter-on-quarter, contributing to a net interest income (NII) growth of about 22% year-on-year and 5% quarter-on-quarter, despite a slight compression in net interest margin (NIM) of around 10 basis points.
For the fiscal year 2026, Bajaj Finance's management has provided guidance for AUM growth between 24% to 25%, which is a slight moderation from earlier projections of 25% to 27%. They anticipate stable NIMs despite a decrease in the cost of funds by approximately 10 to 15 basis points, alongside an improvement in the cost-to-income ratio by 40 to 50 basis points. However, they have also indicated a lower growth rate for fee income, expected to be between 13% to 15%, and credit costs projected to range from 1.85% to 1.95%, leading to a return on assets (RoA) of 4.4% to 4.6% and a return on equity (RoE) of 19% to 20%.
JM Financial has maintained a BUY rating on Bajaj Finance, raising its target price to ₹9,500, which values the stock at 22 times the projected earnings per share for fiscal year 2027. Despite the expected moderation in growth and RoE, the brokerage appreciates Bajaj Finance's ability to navigate through various market cycles.
As of March 31, 2025, the ownership structure of Bajaj Finance shows that promoters hold 54.73% of the company's shares, while foreign institutional investors (FIIs) own 18.9% and domestic institutional investors (DIIs) hold 14.77%. This diverse ownership base reflects a solid foundation of investor confidence in the company.
In summary, Bajaj Finance's recent stock performance and financial results highlight the company's resilience and adaptability in a competitive market. With a strong growth trajectory and strategic initiatives such as raising FD rates, Bajaj Finance continues to position itself as a leader in the NBFC sector.
