Bajaj Finance Share Price: Will it soar past Rs 10,000?

Bajaj Finance share price: Introduction

Bajaj Finance share price: If you are to create a list of companies with multibagger returns, Bajaj Finance's names will always be on that list. To give you some idea - In September 2012, Bajaj Finance shares were trading at around Rs 100 per share. A decade later, Bajaj Finance shares are trading at nearly Rs 7200 per share. In the last month, Bajaj Finance shares have given negative (-2.10%) returns compared to flat NIFTY50 returns. In 2022, Bajaj Finance's share price remained flat and matched NIFTY50 returns. 

Quick Fact: Bajaj Finance started as a two-wheeler financing company in 1987. Today, the company is into financing millions of Indians’ penchant for electronic goods. Bajaj Finance's share price has always been richly valued because of the exponential growth rates the company has delivered.

Bajaj Finance share price: Deepdive

Bajaj Finance Share Price: Reasons for Further Growth

Bajaj Finance has grown in its business numbers exponentially in the last decade, and the same is reflected in the share price. However, many questions are raised about whether there is further upside in the stock market. Let us look at the reasons analysts believe the stock may rise further:

Bajaj Finance share price update:  Entry into the credit card business

• Earlier this year, the Reserve Bank of India (RBI)allowed non-banking finance companies (NBFCs) to enter the credit card business.
• Bajaj Finance is likely to become the first company to enter this new line of business.
• Once the approvals are secured, Bajaj Finance may launch its in-house credit cards. As per reports, the company may launch its credit card by end of this financial year.
• Currently, the NBFC has tied with RBL Bank for co-branded credit cards.

If you look at existing credit card companies, they make a lot of money - through annual fees, late payment charges, interest rates, etc. Bajaj Finance has a large customer base that it can tap for its in-house credit cards. 

Its co-branded credit card users are only 2.96 million, a small percent of its total customer base, which stood at 60 million at the end of the June quarter. 

As per industry experts, the company is targeting a monthly booking of 30,000-plus credit card accounts. It will be a huge source of revenue for the company, and the same is expected to translate into the share price.

Bajaj Finance stock update: Digital Ecosystem

• The company plans to make its web platform (Phase 1) live by October 2022, and phase 2 is expected to go live by the end of the current financial year. 
• The digital ecosystem will help with customer acquisitions, and the new loan trajectory will get stronger.
• For payments, the company has partnered with Worldline to develop point-of-sale (PoS) payments acquiring solutions for merchants.

Bajaj Finance share price insight

Out of 1,238 trading days that Bajaj Finance stock has seen in the last 5 years, below are the Bajaj Finance share price movement insights:

• Bajaj Finance share price ended in green on 656 trading days
• Bajaj Finance share price ended in red on 580 trading days
• Bajaj Finance share price ended flat on 2 trading days

Bajaj Finance Apr-Jun 22 earnings

• Net profit: The company reported a 159% year-on-year jump in consolidated net profit to Rs 2,596.25 crore. 
• NII: Net Interest Income (NII) in June quarter increased by 48% to Rs 6,638 crore as against Rs 4,489 crore in Q1FY22.
• Asset Under Management: AUM rose to Rs 2.04 lakh crore from Rs 1.59 lakh crore, an increase of 28% year-on-year.
• Asset quality: Consolidated gross NPA ratio for Q1FY23 stood at 1.25%. 

For detailed June quarter numbers, check our report here.

Bajaj Finance Share price: Brokerage radar

Motilal Oswal: The Indian brokerage firm has maintained a BUY rating on Bajaj Finance shares with a target price of Rs 7320 per share. They expect the company to deliver a healthy AUM CAGR of ~26% over FY22- FY24. It added that with the digital ecosystem, the company's new loan trajectory and customer acquisitions will get stronger from hereon.

Kotak Securities: The company has given a SELL call for Bajaj Finance share price with a fair value of Rs 5400 per share. The firm believes that while return matrices and current growth remain strong, competitive and macro headlines may not support Bajaj’s rich valuations. Upside risk stems from improved profitability in home loans and higher growth in rural businesses.

JM Financial: The firm has given a BUY rating with a target price of Rs 9000 per share. The brokerage estimated a 27% AUM CAGR over FY22-24, delivering RoE, and RoA, of 24.2 and 4.8%, respectively. The firm said that Bajaj Finance’s recent quarterly results exhibit all-around strength delivered by its adroit liability management continued customer acquisition momentum and normalization of credit costs to pre-Covid levels. 

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