Bajaj Finance and Bajaj Finserv Surge on Positive Brokerage Ratings
The stock market kicked off the new year with exciting action, as shares of Bajaj Finance Ltd. and Bajaj Finserv Ltd. saw significant gains on January 2, 2025. A positive outlook from brokerage firm Citi acted as the catalyst, driving up the prices of both stocks.
Key Highlights
Bajaj Finance's Surge
- Citi’s Positive Outlook: Citi placed Bajaj Finance under a 90-day positive catalyst watch, assigning a "buy" rating with a price target of ₹8,150 per share. This indicates a potential upside of 18% from its previous closing price.
- Stock Performance: In response, Bajaj Finance shares jumped by 6%, becoming one of the top gainers on the Nifty 50 index, trading at ₹7,340.
Bajaj Finserv's Stronger Performance
- While Bajaj Finance showed impressive gains, Bajaj Finserv outperformed, rallying by 7.9% to ₹1,700.7.
What’s Driving the Rally?
- Credit Cost Stability: Citi expects a marginal uptick in Bajaj Finance’s credit costs for the December quarter, moving from 2.05% (FY25 guidance) to 2.2%-2.25%, signaling stability in the company's credit portfolio.
- Growth Metrics: Bajaj Finance is projected to report Assets Under Management (AUM) growth of 6% sequentially and 27% year-on-year, despite challenges in the two-wheeler and three-wheeler financing segments.
- Net Interest Margins (NIMs): Positive expectations for NIMs, with growth driven by high-yielding segments and stabilization in the Cost of Funds, further boosted investor sentiment.
Market Analysts’ Take
Out of the 36 analysts covering Bajaj Finance:
- 26 recommend "buy", signaling strong confidence in the stock's future performance.
- Only six have a "hold" rating, while four suggest a "sell."
Management Transition in Focus
Citi also pointed out the importance of updates on Rajeev Jain, the incumbent MD & CEO of Bajaj Finance. His future role within the company or the broader Bajaj Group remains a critical factor influencing investor confidence.
Looking Ahead
Despite posting negative returns in 2024, Bajaj Finance appears poised for a strong comeback in 2025. The focus will remain on its management updates, credit cost stability, and growth in high-yielding segments.
On the other hand, Bajaj Finserv’s robust performance today highlights its potential as an outperformer in the broader financial sector.
Final Thoughts
With the strong start to the year, both Bajaj Finance and Bajaj Finserv have set a positive tone for the Indian financial sector. Investors will keenly watch upcoming quarterly results and management decisions for further cues.
Reference from:-https://www.cnbctv18.com/market/bajaj-finance-bajaj-finserv-share-price-top-nifty-50-gainers-target-citi-positive-aum-nim-q3-returns-19533355.htm