Bajaj Finance shares fall 6% despite higher-than-expected Q4 profit: What should investors do?

Bajaj Finance shares will gain focus in Friday's session as the NBFC company on the back of steady demand for loans posted a higher-than-expected 21 per cent increase in Q4 profit. In the three months to March quarter, consolidated profit after tax increased to Rs 3825 crore. Consolidated numbers incorporate the earnings of the company's subsidiaries, including Bajaj Housing Finance as well as Bajaj Financial Securities.

"Demand for credit has remained strong over the last few quarters, especially in the retail segment that includes personal loans and credit card spends, driven by consumer spending," said the Reuters report.

Net interest income or the difference between the interest earned and interest spended has also logged a growth of 28.1 per cent.

Also, asset quality at the financing company saw an improvement with gross non-performing assets slipping to 0.85 per cent from 0.95 per cent.

Nevertheless, net interest margin for the period came in lower at 9.9 per cent in comparison to 10.15 per cent in the same period last year.

Global brokerages view on the stock post Q4

Citi, while maintaining buy on the stock, slashed the target to Rs 8675 from Rs 8975, signifying 19 per cent potential upside. The brokerage said that despite being impacted 4 per cent by regulatory bans, the company posted in-line Q4. The NBFC trimmed FY25 guidance bridging premium. The brokerage slashes earnings estimates by 7%/7% for FY25/26E.

Jefferies also continued with its buy rating and slashed the target to Rs 9260 from the earlier Rs 9400, signaling a 27 per cent potential upside. The brokerage said the strong AUM growth of 34 per cent was partly offset by lower NIMs, so NII grew by 28%. While RBI's embargo affected 4Q performance, expect relaxation in 1/2 qtrs, it added. The brokerage also trimmed estimates by 2-3 per cent.