Bajaj Finance stock down 1%; Reports 34% increase in AUM in Q4; Jefferies maintains 'buy' call

According to Jefferies analysts, the Q4FY24 pre-quarter AUM was slightly above their estimate of 33 percent in FY2024.Growth in customer base was healthy, at 21 percent YoY.

Shares of Bajaj Finance opened nearly 1 percent lower on April 5 after the non-banking finance company in a business update reported a 34 percent increase in assets under management and a healthy growth in customer base. At 9:30 am, the stock was trading at Rs 7,215.75.

Bajaj Finance  saw a 34 percent year-on-year (YoY) increase in assets under management (AUM) at Rs 330,400 crore in the March quarter, the company said in the update. Its customer franchise grew to 83.64 million from 69.14 million in the year-ago period, while new loans grew 4 percent to 7.87 million against 7.56 million.

Following the business update, Jefferies stuck to its “buy” call on the stock with a target price of Rs 9,400. The stock, which closed at Rs 7,291.95 on April 4, down 0.24 percent from the previous close, has gained around 26 percent in the past year.

For the same period, consolidated net liquidity surplus stood at approximately Rs 15,700 crore and the deposits book grew to Rs 60,100 crore from Rs 44,666 crore.

According to the company, the new loan book’s growth was weaker on account of the restrictions placed by the RBI on sanctioning  and disbursal of loans under their eCOM and Insta EMI Card.

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According to Jefferies analysts, the Q4FY24 pre-quarter AUM was slightly above its estimate of 33 percent. Growth in customer base was healthy, at 21 percent YoY.

Also read: Bajaj Finance Q3 results: Net profit rises 22% to Rs 3,639 crore

"A key miss was on new loan bookings, where growth fell from 26 percent YoY (QoQ). The new loan bookings might have been 15 percent if not for restrictions on eCom and Insta EMI Card," the report added.

According to the brokerage, while the company has submitted details to RBI, lifting of restrictions would be key to its performance.

The action was announced in November for non- adherence to the provisions of the RBI’s digital lending guidelines.

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