Buy, sell or hold: What should investors do with Bajaj Finance post Q3 result?

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26 Aug, 2025 12:21

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Bajaj Finance share price added 3 percent in the early trade on January 21 after the company announced its December quarter earning a day before.

The company, on January 20, reported a 29 percent year-on-year (YoY) fall in consolidated net profit at Rs 1,145.98 crore for the quarter ended December 2020. Profit in the year-ago period was at Rs 1,614.11 crore.

Consolidated net interest income (NII) came in at Rs 4,296 crore for the said quarter, down 5.3 percent YoY, due to higher reversal of interest income at Rs 450 crore versus Rs 83 crore in Q3FY20 and higher cost of liquidity surplus at Rs 213 crore versus Rs 83 crore in Q3FY20.

Also Read - Bajaj Finance Q3 profit falls 29% YoY, net interest income declines 5%

Here is what the brokerages say about the company and stock post the December quarter result:

Motilal Oswal

3QFY21 was a healthy quarter for Bajaj Finance. The company resumed disbursements in Nov'20. The same reached 90 percent of YoY levels in Dec'20. It regained some lost market share in CD financing in the quarter gone by. Initial asset quality performance of incremental disbursements is in line with or marginally better than pre-COVID levels. This bodes well for asset quality in the medium term.

In the near term, we do not foresee any major asset quality disruption due to COVID-19. The stressed book of ~ Rs 100 bn (Stage 2 + Stage 3 loans) is unlikely to witness any meaningful deterioration in 4QFY21. Margin is likely to witness sharp improvement in FY22 due to lower cost of funds, reduction in liquidity, and favorable base due to interest reversals. Given the rich valuations, we maintain our neutral stance with a target price of Rs 5,000 per share (5.5x FY23E BVPS).

Sharekhan

Bajaj Finance is available at 6.9x/5.7x its FY2022E/FY2023E BVPS and premium valuations are likely to sustain as business transition and growth parameters stabilise. For BFL, the normalisation of business and improved stance on growth etc. indicate that management expects near-term headwinds to wane.

We believe the long-term outlook has improved (liquidity drag to reduce, growth to return in H1FY2022E). Given BFL’s strong balance sheet and business strengths, we believe the company is structurally a 20+ percent ROE business franchise on a normalised steady state basis. We maintain our buy rating on the stock with a revised price target of Rs 6,000.

Prabhudas Lilladher

Company’s Q3FY21 earnings were plagued by asset quality stress, weak PPoP and somber business traction. NPAs at elevated 2.86 percent (PLe: 2.5 percent), interest reversals to the tune of Rs 4.5 bn and slower fee income traction (mere 3 percent QoQ growth) due to caution on disbursements drove down PPoP with a decline of 3 percent QoQ and YoY.

We confide in the company's judicious strategy to curtail disbursements and tighten credit filters in times of uncertainties. Maintain accumulate with a price target of Rs 5,340 valuing at 6.8x PABV MAR'23E (earlier Rs 5,491).

ICICI direct:

Bajaj Finance has sailed through the headwinds and emerged stronger with a leaner operating model and robust growth guidance. Growth guidance of ~ 25 percent for FY22E and opportunity to apply for a banking licence have resulted in renewed interest of investors in the stock.

We believe premium multiples are returning for Bajaj Finance. We maintain valuation at multiple at 7x FY23E ABV and target price at Rs 5900. Maintain buy recommendation on the stock.

At 09:27 hrs Bajaj Finance was quoting at Rs 5,139.55, up Rs 157.60, or 3.16 percent on the BSE.

The share touched its 52-week high Rs 5,372.75 and 52-week low Rs 1,783.10 on 31 December, 2020 and 27 May, 2020, respectively.

Currently, it is trading 4.34 percent below its 52-week high and 188.24 percent above its 52-week low.