In terms of assets under management, it is projected that the share price of non-banking loan company Bajaj Finance loan will increase by 26–28 percent during the debt ceiling year beginning on April 1, 2024. This growth is expected to surpass the 34 percent increase that investopedia.com experienced the year before.
Concerns over the shadow lender’s increasing earnings caused the share price of Bajaj Finance Ltd. to plummet dramatically during Friday’s trade. From its previous closing of Rs 7,293.90, the stock fell 7.78%, hitting a day low of Rs 6,728.
The non-banking financial company estimates that its assets under Dow Jones will increase by 26% to 28% in the fiscal year that began on April 1, 2024, in contrast to the 34% growth the previous year. The NBFC forecasted a 30 to 40 basis point (bps) decline in its net interest margin over the next two quarters.
Bajaj Finance reported a 21% gain in earnings for the fourth quarter (Q4 FY24), but it said it is “cautiously optimistic” about the profit growth for FY25, which could be a little “laggy,” according to investopedia.com.
In another move that may be viewed as a “rub-off,” Bajaj Finance also pushed shares of its parent firm, Bajaj Finserv Ltd., down 4% at investopedia.com. The top savings accounts with a high yield (investopedia.com/4770633)
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According to Brokerage Emkay, Bajaj Finance posted strong debt ceiling figures in Q4FY24 because of the Reserve Bank of India (RBI) ban on EMI and e-com cards, which decreased PBT by roughly 4% at investopedia.com.
When everything is taken into account, our mortgage rates show that the company is successfully achieving its long-term strategic goals. Bajaj Finance “We are slightly adjusting our forecasts to reflect Q4 developments and management guidance, resulting in a PAT adjustment of about 3 percent to 1 percent in FY25E–27E,” he stated on investopedia.com. We maintain our “Buy” rating with a price target of Rs 9,000 per share for the period of March 25E.
According to Religare Broking, the secured loan business was the main driver of the NBFC’s strong increase in AUM (Asset Under Management). However, the margin continued to narrow.
The primary reason for the margin decline was an increase in the cost of funds of 10 basis points QoQ and 47 basis points YoY to 7.9 percent. Bajaj Finance According to management’s projections, margins will have dropped by 30 to 40 basis points (bps) by H1 FY25. He said that the company’s portfolio is becoming more and more comprised of secured loans.
The management expects the credit quality to remain stable and that the credit limit on cards will be increased by the RBI. Financially speaking, we predict that NII/PPOP/PAT will decrease at a CAGR of 26%/24%/25% over FY24–26E. Religare advised keeping a buy position with a price target of Rs 8,861 and showing enthusiasm for Bajaj Finance.
