In the past month, NBFC Bajaj Finance Ltd.'s shares have dropped 14%. Following the release of the Q3 earnings on January 29, the large cap shares of this has decreased by 8.5%.
However, in just one month, the benchmark Sensex has dropped 2.06%. The moving averages of five, ten, twenty, thirty, fifty, hundred, 150, and 200 days are all below the stock's current trading price. This indicates that the NBFC stock is within a negative trading range.
For the past year, investors in Bajaj Finance have had a marginal return of 2.18%. In all other cases, the stock had negative returns for one week, one year, three months, six months, and two years, with a maximum of three years. In three years, it may generate returns of 18%.
The price to book ratio for the company is 7.47. Compared to the industry expectation of 31.33, the company's PE is 29.45. On October 6, 2023, the stock reached an all-time high of Rs. 8190. Since then, the stock has experienced a 20% loss.
The Bajaj Finance shares ended the previous session on the BSE 1.19 percent down, at Rs 6575.60. Bajaj Finance's market value decreased to Rs 4.06 lakh crore.
On Monday, a total of 0.73 lakh shares of the company were exchanged, resulting in a turnover of Rs 47.91 crore.
The relative strength index (RSI) for Bajaj Finance is 33.2, indicating that the stock is neither overbought nor oversold. Oversold is defined as a level below 30, and overbought is defined as a value beyond 70. With a one-year beta of 0.5, Bajaj Finance stock shows little volatility over that time. Following Q3 earnings, brokerage KR Choksey has cut its target price but kept its buy call.
"To reach a target price of Rs 8,600 per share (previously Rs 9,475), we apply a price to adjusted book value multiple of 4.8 times on FY26 estimates adjusted book value of Rs 1,792.4 (earlier 6.2 times FY25E ABV). As a result, we continue to recommend buying BAF shares, according to KR Choksey. JM Financial anticipates that the stock will reach the Rs 10,000 mark. It anticipates that regulatory constraints on the NBFC would be loosened, which might lead to a stock market surge.
"We think that Bajaj Finance is still the best option for diverse consumption, with solid risk controls, rapid growth, and exceptional return ratios - even with a little increase in loan costs in 3QFY24. We believe that Bajaj Finance, a solid incumbent with a long and reliable history in consumer lending, will only get stronger over the course of the next two to three quarters as worries about unsecured loans fade. BAF's solid RoA/RoE profile and capacity for cycle expansion make its present prices at 23 times FY25e appealing,” stated JM Financial.
For the quarter ending in December 2023, Bajaj Finance recorded a 22% increase in its consolidated net profit. Compared to a year earlier, when net profit was Rs 2,973 crore, it increased to Rs 3,639 crore in the most recent quarter.
From Rs 5,922 crore during the same time last year to Rs 7,655 crore in Q3, net interest income increased by 29%. Furthermore, from Rs 7,438 crore in the same period last year to Rs 9,298 crore in the October–December quarter this year, total income increased by 25% year over year. Loan losses and provisions for the NBFC increased to Rs 1,248 crore in the third quarter compared to Rs 841 crore in the same period last year.
