Bajaj Finance Share Price

Bajaj Finance Ltd. Fundamental Analysis

This article seeks to analyze Bajaj Finance Limited based on its business model and industry fundamentals so that we may evaluate if it would be a great investment choice for you.

Bajaj Finance Limited

Bajaj Finance Limited (BFL) is an Indian non-banking financial company (NBFC) which is headquartered in Pune. It serves as a subsidiary of Bajaj Finserv Ltd., and it has been registered with the Reserve Bank of India (RBI) as a deposit-taking NBFC, which falls under the category of NBFC-Investment and Credit Company (NBFC-ICC).

The business of this company is involved with lending and acceptance of deposits that have a diverse lending portfolio across retail, SMEs, and commercial customers.

As of March 2024, BFL had a total client base of 83.64 million with assets under management valued at INR 3306.15 billion ($41 billion). It provides various financial services products to its clients including consumer finance, durable finance, lifestyle finance, digital product finance, and two-wheeler & three-wheeler finance.

Furthermore, BFL operates in different parts of urban and rural India having the highest domestic credit rating for its long-term and short-term borrowings.

Is the Finance Sector a Goldmine Investment?

The finance sector in India is poised for significant growth and presents a promising investment opportunity. India is likely to become the world’s third-largest economy by 2027, and have the third-largest stock market by 2030.

The financial services sector will grow rapidly by 2035, driven by rising incomes, increased government focus on financial inclusion, and digital adoption. India’s GDP could more than double from $3.5 trillion today to exceed $7.5 trillion by 2031. This growth is expected to boost India’s share of global manufacturing, expand credit availability, create new businesses, improve quality of life, and spur a boom in consumer spending.

In light of these factors, Bajaj Finance Limited stands out as a strong investment choice. The company has consistently demonstrated solid performance and growth, making it a potentially profitable investment in the Indian finance industry.

Who are Bajaj Finance Limited competitors in the Finance Sector?

Bajaj Finance Limited operates in a competitive environment within the finance sector in India. Some of its primary competitors include:

• Mahindra Finance
• Muthoot Finance
• Reliance Capital
• Manappuram
• Sundaram Finance Ltd.

History of Bajaj Finance Limited

Here’s a brief history of Bajaj Finance Limited:

• Incorporation: Bajaj Finance Limited was originally incorporated as Bajaj Auto Finance Limited on March 25, 1987. It primarily focused on providing two and three-wheeler finance.
• Product Range: Bajaj Finance offers a diversified range of financial services. This includes Consumer Durable Loans, Lifestyle Finance, Digital Product Finance, Personal Loans, Loan against Property, Small Business Loans, Home loans, Credit Cards, Two-wheeler and Three-wheeler Loans, Commercial lending/SME Loans, Loan against Securities and Rural Finance.
• Infrastructure: Bajaj Finance has a significant presence in both urban and rural India, with over 33,000+ distribution points and 1,50,000+ stores. It is headquartered in Pune.
• Certifications: Bajaj Finance holds the highest domestic credit rating of AAA/Stable for long-term borrowing, A1+ for short-term borrowing, and CRISIL AAA/Stable & ICRA AAA (Stable) for its Fixed Deposit program.
• Awards and Recognition: Bajaj Finance has been recognized in the top 30 best places to work for in the BFS Sector 2022 by the ‘Great Place to Work’ Institute. It also bagged Gold for ‘Digital Marketing Excellence in Financial Services’ at the DIGIXX 2019 Awards.

Company Profile of Bajaj Finance Limited

Pros:

• Strong Revenue Growth: Bajaj Finance reported a significant increase in revenue to INR 149,319.8 million in Q4 2024, up from INR 113,675.4 million in the previous year.
• Net Income Rise: The company’s net income also saw a healthy rise to INR 38,245.3 million in Q4 2024, compared to INR 31,577.9 million a year ago.
• Consolidated Sales Growth: The consolidated net sales for March 2024 stood at Rs 14,926.21 crore, marking a 31.4% year-on-year growth.
• Dividend Declaration: A dividend of Rs 36 was declared, which is a positive sign for investors looking for regular income from dividends.

Cons:

• Exposure to Riskier Segments: BFL has exposure to relatively riskier segments such as personal loans, unsecured business loans, and consumer durable financing, which could be vulnerable to economic downturns.
• Regulatory Challenges: The RBI-imposed embargo on Insta EMI cards and e-commerce loans, which account for approximately 4-5% of disbursements, could impact near-term growth.
• Credit Cost: For the nine months of fiscal 2024, the credit cost remained contained at 1.4% (annualised). However, earnings are susceptible to high credit costs, especially during continued macroeconomic stress.
• Growth Concerns: Despite a forecasted earnings growth, there’s a miss in revenue by 5.6%, which might indicate potential challenges in achieving future growth targets.

The Finances

Here’s a summary of Bajaj Finance Limited’s financial information as of June 2024:

Shareholding pattern of Bajaj Finance Limited

Here’s a concise summary of Bajaj Finance Limited’s shareholding pattern as of June 2024 :

• Promoters: Hold 54.7%.
• Foreign Institutional Investors (FII): 17.1%
• Domestic Institutional Investors (DII): 17.8%
• Public: 10.2%

Peer Multiple Comparison

Let’s compare Bajaj Finance Limited with its peers that have complete data available. Here’s a concise table: