Bajaj Finance shares fall nearly 2% despite bullish bets post Q4 business update

Bajaj Finance shares settled with a cut of 1.25 per cent or Rs 91 at Rs 7191.2  in Friday’s trade (April 5, 2024) even as global brokerages remained upbeat on the NBFC stock post its decent Q4FY24 business update.

At the day’s low, the stock touched levels of Rs 7158, down 1.71 per cent over the previous close, while at the day's high it scaled levels of Rs 7263.95 apiece on the BSE. 

After market hours on Thursday, the company in its Q4FY24 business update informed  the following on a consolidated basis:

-Customer franchise as of 31 March 2024 stood at 83.64 MM as compared to 69.14 MM as of 31 March 2023. 

-New loans booked during Q4 FY24 grew by 4% to 7.87 MM as compared to 7.56 MM in Q4 FY23. The new loans booked during the quarter were lower by 0.80 MM on account of the restrictions placed by the RBI on the Company, on sanction and disbursal of loans under ‘eCOM’ and ‘Insta EMI Card’. 

-Assets under management (AUM) grew by 34% to approximately Rs 330,400 crore as of 31 March 2024 as compared to Rs 247,379 crore as of 31 March 2023. AUM in Q4 FY24 grew by approximately Rs  19,400 crore. 

-Consolidated net liquidity surplus stood at approximately Rs 15,700 crore as of 31 March 2024, signifying strong liquidity position.

-Deposit book stood at approximately Rs 60,100 crore as of 31 March 2024 as compared to Rs 44,666 crore as of 31 March 2023, a YoY growth of 35 per cent.

Here’s what global brokerages say about Bajaj Finance post Q4FY24 business update:

Global brokerage Jefferies has maintained its ‘buy’ stance on the counter with the highest target of Rs 9400, suggesting potential gains of 29 per cent over the previous close. The brokerage held that the company’s 4Q update shows robust AUM growth of 34% per cent as against 35 per cent in 3Q, slightly above estimates. However, the key miss was on new loan bookings, where growth fell from 26 per cent on year in 3Q to 4 per cent in 4Q. Further, the brokerage said that the loan growth at the NBFC might have been over 15 per cent if not for restrictions on eCom & Insta EMI Card. Also, Jefferies noted that the company has submitted details to the apex bank, and lifting of restrictions is key.

Morgan Stanley also maintains an ‘overweight’ stance on the NBFC stock with a target of Rs 9250. Meanwhile, Citi is bullish on Bajaj Finance and reiterates its ‘buy’ view with a target of Rs 8975.