Shares of Bajaj Finance dropped over 3 percent on October 4, 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.
At 09.32 am, shares of Bajaj Finance were trading at Rs 7,205.25 on the NSE.
The NBFC company's AUM grew 29 percent 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 customer franchise increased sharply to 92.09 million as of the September quarter, compared to 7.66 crore in the base period last fiscal. New loans booked rose by 14 percent to close to 1 crore, and the deposits book rose by 21 percent to Rs 66,100 crore. On the other hand, the net liquidity surplus stood at Rs 20,100 crore as of Q2.
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, with a price target of Rs 9,000, implying an upside potential of 21 percent from the stock's last closing levels.
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