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Bajaj Finance share rises 5%, hits record high post Budget 2025; here's why

In the past six trading days, Bajaj Finance share has soared 15 per cent. On January 30, 2025, the stock had surpassed its previous high of Rs 8,190 touched in October 2023

Bajaj Finance

SI Reporter New Delhi

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Bajaj Finance share price: Non banking financial company (NBFC) Bajaj Finance shares surged 5.05 per cent on February 3, 2025, hitting an all-time high of Rs 8,405.95 per share.
 
In the past six trading days, Bajaj Finance share has soared 15 per cent. On January 30, 2025, the stock had surpassed its previous high of Rs 8,190 touched in October 2023.
 
Thus far in the calendar year 2025, Bajaj Finance has outperformed the market by surging 21 per cent. In comparison, the BSE Sensex was down 2 per cent during the period.
 
The increase in Bajaj Finance share price today came 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. 
 
CLSA analysts believe that the budget measures will result in higher discretionary cash flows for mid-income households, leading to an uptick in durable goods consumption.  
"Even as the boost to consumption demand may benefit Consumer Goods plays in the near-term, an indirect and a more durable trend may emerge for retail credit lenders. About 18 per cent of retail credit customers are from less than Rs 0.5 mn bracket and of that, 40 per cent avail unsecured credit. The support to household balance sheets should help limit incremental slippages on unsecured lending portfolio," said analysts at Elara Capital in a Budget analysis report.
 
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. 
 
Of total loans worth Rs 3,98,043 crore disbursed by Bajaj Finance, Mortgages’ share stood at 30.7 per cent, two and three-wheeler finance (4.8 per cent), Gold Loans (1.8 per cent), and car loans (2.8 per cent).
 
That apart, the focus on boosting consumption, while maintaining fiscal discipline, now shifts to the Reserve Bank of India (RBI). A major portion of analysts, excluding Yes Bank, expect a 25-basis-point rate cut from the RBI, which would support economic growth by lowering borrowing costs.
 
If the RBI cuts the policy repo rate, it could further benefit Bajaj Finance. Lower interest rates reduce the cost of borrowing for non-banking financial companies (NBFCs), which often rely on external funding for lending activities. A reduction in borrowing costs would help NBFCs boost their profit margins, particularly those with high financing costs.
 
Bajaj Finance Q3 results 
 
In Q3FY25, Bajaj Finance reported an 18 per cent year-on-year (Y-o-Y) increase in net profit at Rs 4,308 crore. The company's strong loan growth during the holiday season, with 12.06 million new loans booked (a 22 per cent increase from last year), contributed to this performance. 
 
Net interest income also grew 23 per cent to Rs 9,382 crore, while assets under management rose 28 per cent to Rs 3.98 trillion.
 
Despite the positive results, the company’s provisions for potential bad loans increased by 64 per cent to Rs 2,043 crore. 
 
Bajaj Finance's gross non-performing asset (NPA) ratio also expanded to 1.12 per cent from 0.95 per cent a year ago, reflecting pressure from unsecured loan segments like credit cards and personal loans.
 
The market capitalisation of Bajaj Finance is Rs 5,17,172.68 crore, according to BSE.
 
At 2:50 PM, Bajaj Finance shares continued to trade near all-time high levels. In comparison, BSE Sensex was trading 0.49 per cent lower at 77,122.11 levels.

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First Published: Feb 03 2025 | 2:56 PM IST

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