Bajaj Finance is poised to attract attention on April 5 following its business update, which revealed a notable 34 percent surge in assets under management (AUM) and robust growth in its customer base.
In the March quarter, Bajaj Finance recorded a 34 percent year-on-year increase in AUM, reaching Rs 330,400 crore. The company also reported a significant expansion in its customer franchise, which grew to 83.64 million from 69.14 million in the corresponding period last year. Additionally, new loans witnessed a 4 percent growth to 7.87 million, compared to 7.56 million previously.
Jefferies maintained its “buy” recommendation on the stock with a target price of Rs 9,400 following the business update. Despite closing at Rs 7,291.95 on April 4, marking a marginal decline of 0.24 percent from the previous close, the stock has gained approximately 26 percent over the past year.
During the same period, Bajaj Finance reported a consolidated net liquidity surplus of approximately Rs 15,700 crore, while its deposits book expanded to Rs 60,100 crore from Rs 44,666 crore.
However, the company noted that the growth in the new loan book was tempered due to restrictions imposed by the Reserve Bank of India (RBI) on the sanctioning and disbursal of loans under the eCOM and Insta EMI Card.
According to analysts at Jefferies, the Q4FY24 pre-quarter AUM slightly exceeded their estimate of 33 percent, with a healthy 21 percent year-on-year growth in the customer base.
Although the company has submitted details to the RBI, the lifting of restrictions will be crucial for its performance, particularly concerning new loan bookings. The imposition of restrictions was announced in November due to non-adherence to the provisions of the RBI’s digital lending guidelines.
Disclaimer: It is advisable for users to seek advice from certified experts before making any investment decisions.
