Bajaj Finance share price target: Why Jefferies is bullish on NBFC stock despite premium valuation

Bajaj Finance share price rose nearly three and half per cent in Monday's intraday trade to become the top gainer on the Nifty50 and the 30-shares Sensex.  

Shares of NBFC-major Bajaj Finance jumped 3.4% to Rs 7,521.30 per share on the National stock Exchange (NSE) and rose three and half per cent to Rs 7523.95 per share on the BSE.  

Bajaj Finance share price jumped after Jefferies raised the target price of the stock. The global brokerage, however, recommended a hold rating.  

Bajaj Finance share target price 

Jefferies maintained a hold stance on Bajaj Finance stock with a target price of Rs 8000, an upside of 10% on the previous closing price of Rs 7289.85. The previous target price was Rs 7300. 

It says the NBFC giant can leverage existing franchise to build on own credit card business, would add new leg of profit pool and deepen client engagement.  

Bajaj Finance has a shot at being the first NBFC to launch credit card, if RBI approves. "If Bajaj Finance gets approval to foray here, it would be able to leverage its network of +3,500 branches, 140k merchant relationships and 60m customers to ramp-up.This would enable BAF to take product to deeper markets as against the Top-100 towns where it sells cards of RBL Bank/ DBS Bank and where majority of players operate," it said in a note 

Despite the premium valuations of Bajaj Finance, Jefferies remains bullish.  

"BAF continues to deliver stronger than peer-group growth as well as profitability. Moreover, even if there is some moderation in NIMs due to rise in funding costs, it could get compensated by potential for operating efficiencies. These would support its premium valuations," it added.  

Bajaj Finance Share Price History 

Shares of Bajaj Finance have shown a good run in the past three months. The large-cap counter rose over 38% in the last three months, as on September 19. Bajaj Finance share price one-year return remains flat, however, the stock more than doubled investors' money with over 115% return in the past two years. Shares have clocked nearly 7000% return in the past 10 years. Bajaj Finance hit 52-week high of Rs 8,043.50 on January 19 this year, while traded on year-low value of Rs 5,235.60 on June 17, 2022.  

Headquartered in Pune, Bajaj Finance is the lending arm of Bajaj Finserv. It is one of the most diversified NBFC in India.