Bajaj Finance's AUM Grows 33%, New Loans Booked Up 26% In Q2; Stock Hits New 52-Week High; Buy Or Sell?

Bajaj Finance's share price witnessed a bittersweet sentiment from investors during Wednesday's session. The NBFC giant went from crossing the Rs 8,000 mark and hitting a fresh 52-week high to closing in red with a downside of over 1%. The company is in focus for a bunch of reasons.

Firstly, it recorded 33% YoY growth in AUM, while customer addition remains healthy, as per the latest Q2 update. Secondly, investors are awaiting Bajaj Finance's fundraising plan which is expected to be around $1 billion, and thirdly, its upcoming financial results for the quarter ending September 30, 2023, which is also scheduled later this month.

On BSE, Bajaj Finance shares ended at Rs 7854.50 apiece, down by 1.44% with a market cap of nearly Rs 4.76 lakh crore. In the trading hours, the stock touched a new 52-week high of Rs 8,040.55 apiece.

During the September 2023 quarter, the NBFC giant recorded a 26% rise in new loans booked to 8.53 million as compared to 6.76 million in Q2 of FY23. Customer franchise increased by 3.58 million, totalling 76.56 million as of September 30, 2023, as against 62.91 million as of September 30, 2022.

Meanwhile, the company's assets under management (AUM) grew by 33% to approximately Rs 290,200 crore as of 30 September 2023 as compared to Rs 218,366 crore as of 30 September 2022. AUM in Q2 FY24 grew by approximately Rs 20,100 crore.

Also, its deposit book stood at approximately Rs 54,800 crore as of 30 September 2023 as compared to Rs 39,422 crore as of 30 September 2022, a YoY growth of 39%.

Moreover, its net liquidity surplus stood at approximately Rs 11,400 crore as of 30 September 2023. Bajaj Finance said, "The Company's liquidity position remains strong."

After the Q2 provisional update, focus has now shifted towards Bajaj Finance's fundraising plan which will be discussed for approval in a board meeting scheduled on October 5, 2023.

The board will consider a proposal for raising funds through any or all of various methods including by way of preferential issue, or qualified institutions placement, subject to such regulatory/statutory approvals as may be required, including approval of the shareholders of the company.

Apart from this, Bajaj Finance will announce its unaudited standalone and consolidated financial results of the company for the quarter and half year ending 30 September 2023, on October 20th.

According to Motilal Oswal, momentum in new loans was weaker relative to 2Q of prior fiscal years. However, the company posted healthy customer acquisitions and strong AUM growth despite seasonality.

The brokerage in its note dated October 4th said, "New customer acquisitions remained healthy in 2QFY24 as BAF added 3.58 million new customers (vs. 2.61 million YoY and 3.85 million QoQ) to its portfolio. The total customer franchise stood at ~76.6 million, up ~22% YoY."

Further, the brokerage highlighted AUM growth was ahead of expectations, with reported AUM growing ~33% YoY/~7.4% QoQ to Rs 2.9 trillion. It said AUM growth of 33% YoY suggests that disbursements were strong in most product segments, including 2Ws across multiple OEMs.

Accordingly, Motilal Oswal has recommended buying Bajaj Finance shares post Q2 provisional data.

Not just that Axis Securities has selected Bajaj Finance as the pick of the current week. In its research note, the brokerage said, "We recommend a BUY rating on the stock with a TP of Rs 8,590."

Disclaimer:

The recommendations made above are by market analysts and are not advised by either the author nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.