Bajaj Finserv Shares: Can Bajaj Finance, Bajaj Finserv shares sustain momentum?


NEW DELHI: Shares of Bajaj group holding company Bajaj Finserv and its subsidiary Bajaj Finance scaled fresh all-time intraday highs on Wednesday, for the second session after a similar show on Tuesday.

Bajaj Finance touched an intraday high of Rs 4,277.50 after the company on Monday launched its Rs 8,500 crore qualified institutional placement (QIP). BlackRock, Nomura, GIC of Singapore and others lapped up the shares in the Rs 8,500 crore private placement to qualified institutional investors.

However, the scrip pared gains to close 1.04 per cent or Rs 43.90 lower at Rs 4,185.90, while the benchmark BSE Sensex settled 221.55 points or 0.55 per cent higher at 40,469.78. Shares of Bajaj Finance have more than doubled investors’ wealth in the past 22 months. The scrip was trading around Rs 1,756 in December 2017.

Bajaj Finance in October said that its consolidated profit after tax jumped 63 per cent to Rs 1,506 crore during the July to September quarter from Rs 923 crore in the same period of the previous year.

Net interest income of the country’s largest consumer durable lender was up by 48 per cent to Rs 3,999 crore from Rs 2,708 crore in Q2FY19.

JM Financial in its report on October 31 maintained a ‘buy’ rating on Bajaj Finance with an immediate target price of Rs 4,251 and thereafter Rs 4,316.

“Bajaj Finance has a strong risk management framework with a large client base and best practices in terms of measures in keeping strong asset quality confidence. In a declining interest-rate regime, BAF has strong pricing power and is better placed to tap growth,” JM Financial said in a report.

Meanwhile, shares of Bajaj Finserv hit an intraday high of Rs 8,874.95 on Wednesday on BSE. The stock, however, ended lower after paring gains in afternoon trade. Net profit of Bajaj Finserv advanced 71 per cent YoY to Rs 1,204 crore in the second quarter of the current fiscal.

It had posted a profit of Rs 704 crore in the corresponding July-September quarter of the previous fiscal ended on March 2019.

Bajaj Finserv is the holding company for the various financial services businesses under the Bajaj group. Edelweiss Securities on October 23 gave ‘Reduce’ call to Bajaj Finserv with a target price of Rs 6,938. “While we like the sustained momentum in operating variables, risk aversion in the current environment and uncertainty surrounding moderation in customer demand warrants ‘valuation rationalisation’. Despite the decent operating performance, the run-up in stock renders risk-reward unfavourable,” it said.


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