Share price of Bajaj Finance gained over 3 percent on January 30 and was the top index gainer after the NBFC reported 40 percent year-on-year (YoY) jump in its consolidated net profit at Rs 2,973 crore for the Q3FY23, largely in line with analysts’ expectations.
On a standalone basis, company's net profit grew 36 percent to Rs 2,624 crore.
The net profit surge comes on the back of a healthy growth in disbursements that lifted net interest income by 24 percent to Rs 7,435 crore for the December quarter.
Here is what brokerages have to say about stock and the company post December quarter earnings:
Morgan Stanley
Overweight rating with a target price of Rs 8,000 per share
Consensus earnings revisions remain positive. Return on Equity (RoE) profile is at a record high, the foreign brokerage firm noted.
"Valuations near 1 standard deviation, below its 5-year mean," it added. Interest rates likely peaking should be tailwinds for the company.
Motilal Oswal
Maintain 'Buy' with a Target Price of Rs 6,880
Customer acquisitions and the new loan trajectory have been strong.
The momentum will only get stronger ahead, with the digital ecosystem - app, web platform and full-stack payment offerings - in place.
Broking firm raises its FY23 estimates by ~2% to factor in better margins and estimates company to deliver a RoA/RoE of 4.6%/24% over the medium term.
Prabhudas Lilladher
Maintain ‘Buy’ rating and reduce our Target Price to Rs 7,835 from Rs 8,953 as broking house increase its FY23/24/25 NII estimates by 3.9%/1.9%/2.4%, given decrease in cost of funds from 7.5%/7.6%/7.7% to 7.2%/7.3%/7.4%.
The impact of rate hikes on cost of funds is more gradual than anticipated
Re-rating can happen if company executes long range strategy framework and increase stickiness of new franchise customers.
Nirmal Bang
Maintain 'Buy' on Bajaj Finance with a target price of Rs 7,107
Overall, the company’s digital strategy is progressing well, with various metrics on the app business, payments, marketplace etc reporting a sequential improvement
Also, the company plans to foray into multiple product lines going forward.
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