Bajaj Finance Share Price Faces Pressure, But Jefferies Remains Bullish
Bajaj Group’s NBFC unit, Bajaj Finance, is currently facing selling pressure in its shares. However, brokerage firm Jefferies is still optimistic about the company’s prospects and has increased its target price for the stock. Despite a dip in funding costs and a decline in loan growth, the brokerage firm believes that investing in Bajaj Finance is still positive.
Key Highlights:
– Bajaj Finance’s loan book continues to grow at a rate of 27% YoY, which is a positive sign for the company.
– Jefferies’ analysts believe that Bajaj Finance’s earnings could grow by 26% and its RoE by 25% CAGR by 2023-26.
– The brokerage firm has increased its target price for Bajaj Finance’s shares to INR 8,310 from INR 7,280.
– Bajaj Finance’s shares are currently trading at INR 7,017.05, down 0.34% on BSE.
Why is Jefferies Bullish on Bajaj Finance?
According to Jefferies, Bajaj Finance’s CEO, Rajeev Jain, presented the company’s future growth prospects positively. The CEO mentioned that the company’s position in the retail credit segment remains strong. Although the company’s share in the volume of loans has decreased slightly, its value has increased. Additionally, the company has announced its entry into new segments, such as auto, tractor commercial vehicles, MFAI, and emerging corporates, which are expected to expand its customer base.
Bajaj Finance’s target is to achieve a 4-5% share in retail credits and 3% share in payments. Jain has been with the company for over 16 years, and his tenure is set to end in April 2025. However, he believes that the company’s second line of management is strong enough to continue the company’s growth trajectory even after he leaves.
In Conclusion
Bajaj Finance’s shares are currently facing selling pressure in the market. However, Jefferies remains optimistic about the company’s future prospects and has increased its target price for the stock. The brokerage firm believes that the company’s loan growth and funding costs are still positive, and Bajaj Finance is likely to remain a top financial pick in the market.
Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of any agency of the government or any other organization. This article is meant for informational purposes only and should not be considered as investment advice. It is recommended that readers consult a certified expert before making any investment decisions.
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