Bajaj Finance hits new high, zooms 20% in 1 month; overtakes HUL in m-cap

Bajaj Finance hit a new high of Rs 8,736, up 3% on the BSE in Thursday's intra-day trade, surpassing its previous high of Rs 8,655.20 touched on February 6, 2025.

Shares of Bajaj Finance hit a new high of Rs 8,736, gaining 3 per cent on the BSE in Thursday’s intra-day trade in an otherwise subdued market, on expectations of healthy growth outlook. The stock of the non-banking finance company (NBFC) surpassed its previous high of Rs 8,655.20 touched on February 6, 2025.

 

At 12:26 pm; Bajaj Finance was trading 2 per cent higher at Rs 8,690, as compared to an unchanged in BSE Sensex at 74,605. In past one month, Bajaj Finance outperformed the market by surging 20 per cent, as against 1 per cent decline in the benchmark index.

 

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A sharp upward movement in the stock price has helped Bajaj Finance with market capitalization of Rs 5.39 trillion, pip fast moving consumer goods (FMCG) giant Hindustan Unilever (HUL) (Rs 5.27 trillion) in market capitalisation ranking.

 

Bajaj Finance’s outperformance in past one month was triggered after Finance Minister Nirmala Sitharaman, in her Budget 2025 speech, announced the decision to raise the income tax exemption limit to Rs 12 lakh per year under the new tax regime. Individuals with taxable incomes of Rs 12 lakh, Rs 18 lakh, and Rs 25 lakh stand to save Rs 80,000, Rs 70,000, and Rs 1.1 lakh in taxes, respectively.

 

The change is expected to boost disposable income, stimulating consumption, analysts said.

 

Bajaj Finance’s product suite includes Consumer Durable Loans, Digital Product Loans, Lifestyle Product Loans, Lifecare financing, EMI Card, Retail spend financing, 2W and 3W financing, Salaried Personal Loans and Retailer finance among others.

 

Meanwhile, in the October-December quarter (Q3FY25), Bajaj Finance logged a strong quarter, with a better than expected profit after tax (PAT) of Rs 4,300 crore. Credit costs were stable sequentially at ~2.1 per cent, with the management expecting improvement in Q4 due to better collection efficiency observed in December 2024 and January 2025, and maintained full-year FY25 guidance at 2-2.1 per cent.

 

Confident about its growth trajectory, the management expects ~25 per cent business expansion while sustaining current margins and achieving PAT growth of ~20-22 per cent, emphasizing that quality and margins will not be compromised for growth, analysts at Emkay Global Financial Services said in Q3 result update.

 

Additionally, net interest margins (NIMs) are expected to be stable, with scope for improvement in operating expenses. All these factors combined should be driving ~25 per cent consolidated balance sheet growth and ~23-24 per cent PAT growth in FY26. With Rajeev Jain’s tenure ending in March 2025, the board will review a comprehensive plan then. Jain intends to continue with the Bajaj Finserv Group and remain actively involved in its strategy and overseeing its subsidiaries, the brokerage firm had said. Analysts reiterate BUY on the stock, raising December-2025E target price at Rs 8,800 (vs Rs 8,400 earlier), implying FY26E P/BV of 5.2x on a standalone basis.

 

Meanwhile, the Reserve Bank of India decided to roll back the additional 25 percentage points risk weight it had imposed on bank loans to NBFCs in November 2023. Starting April 1, 2025, banks will go back to assigning risk weights based on NBFCs’ external credit ratings, as per Basel III regulations.

 

The reversal of increased risk weights for NBFCs is a positive for sector growth, according to the analysts.

 

The rollback of additional risk weight on bank loans to NBFCs will ease capital requirements for banks, boosting credit flow to the shadow banks. This may lower NBFCs’ borrowing costs thereby aiding margins, ICICI Securities said in a note.