Bajaj Finance Shares Dip 3% After Q2 Update Sees Slowest AUM Growth In Six Quarters

Shares of Bajaj Finance fell by 2.6 per cent to a day’s low of Rs 7,240 on the BSE, a day after the non-bank finance lender reported its Q2 business update that saw the slowest AUM (Assets Under Management) growth in six quarters.

The NBFC company’s AUM grew 29 per cent to Rs 3,73,900 crore in the July-September quarter as compared to Rs 2,90,264 crore during the same period last fiscal. Despite the increase in AUM, it was still the slowest rate of AUM growth for the NBFC company in six quarters.

“The company’s Loan Assets (AR) stood at approximately Rs 89,860 crore as of 30 September 2024 as compared to Rs 70,954 crore as of 30 September 2023,” it said.

In the case of Bajaj Finance, the NBFC said its customer franchise stood at 92.09 million at the end of September quarter compared with 76.56 million in the year-ago quarter. In Q2FY25, the NBFC added 3.88 million customers.

Bajaj Finance said its new loans booked grew 14 per cent to 9.69 million in Q2FY25 compared with 8.53 million in Q2FY24.

Meanwhile, Bajaj Finance said its deposits book stood at Rs 66,100 crore as of September 30, 2024, compared with Rs 54,821 crore as of September 30, 2023, a growth of 21 per cent.

Analysts’ Take

Following the Q2 business update, brokerage firm Nomura remarked that credit costs will remain the key monitorable for Bajaj Finance in Q2. “Any increase in FY25 credit cost guidance would be taken negatively by Street and vice-versa,” Nomura wrote in a note. The firm has a ‘neutral’ call on Bajaj Finance with a price target of Rs 7,500.

On the other hand, Morgan Stanley believes that the point of focus in Q2 will be the management’s confidence in asset quality improvement from Q3. That said, Morgan Stanley also feels the commentary on the future trajectory of credit costs will remain on the radar.

Morgan Stanley has an ‘overweight’ rating on Bajaj Finance and a price target of Rs 9,000. This rating implies an upside potential of 21 per cent from the stock’s last closing levels.

Bajaj Finance shares have delivered a flattish return in 2024 so far, against a 14 per cent jump in the BSE Sensex during the same period. Bajaj Housing Finance is off its recent high of Rs 188.45 apiece, but it has more than doubled over its IPO issue price of Rs 70. The stock was listed on September 16.

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