Shares of Bajaj Finance decreased 1.95%, or Rs 119.25, to close at Rs 5,980.60 on the BSE today. Shares of Bajaj Finance decreased 2.6% during the day to Rs 5,941 level. After six months, the Bajaj Finance stock has now fallen below the Rs. 6,000 threshold following today’s downturn. (July 18, 2022).
Bajaj Finance’s stock is now trading 25% below its January 19, 2022 52-week high of Rs. 8043.50. On the other side, on June 17, 2022, the price of Bajaj Finance stock fell to a 52-week low of Rs. 5,235.60.
Investors in Bajaj Finance are in a pickle as the NBFC company has lost about Rs 33,500 crore in market cap over the past two days due to a correction. Bajaj Finance announced weaker-than-expected AUM (Assets Under Management) growth for the December quarter, which caused shares to conclude the day 7.2% lower at Rs 6,099.85.
After the NBFC announced lower-than-expected AUMs (Assets Under Management) growth in the December quarter, shares of Bajaj Finance dropped 7.2% to Rs 6,099.85 on Thursday.Bajaj Finance shares lost another 2.6% intraday to Rs 5,941 mark on Friday, continuing their downward trend. The Bajaj Finance stock has dropped below Rs 6,000 for the first time in six months with today’s fall. (July 18, 2022).
With a sell rating and a target of Rs 5,800, Kotak Institutional Equities is even more pessimistic on the company. Jefferies has a hold rating and a target price of Rs 8,160, on the other hand. Over 9% of the stock’s value has been lost in only two sessions, and it has lost 22.81% of its value over the past year.
Jigar S Patel, Senior Manager- Technical Research Analyst – “Since last four months, the said counter has been making lower highs and lower lows structure, which resulted in a 22% cut in price,” according to Anand Rathi Shares and Stock Brokers. Massive volume and a beating of almost 10% were seen in the last two trading sessions, indicating that the fall is still ongoing. The next reliable support can be found between Rs. 5600 and Rs. 5700, where one can start a new long.
The daily MACD has produced a bearish cross below the zero line, suggesting that there will be more weakening in the sessions to come.
Sneha Seth, “Considering the recent price action, undoubtedly the trend is strong bearish, but looking at the bigger picture, it’s not advisable to exit after 20% price decline from recent high,” stated Angel One Ltd.’s derivatives research analyst.
It would be fascinating to watch how this stock reacts around its cluster of support, which is Rs 6,000-5,800, for traders.
A R Ramachandran The stock is beginning to enter oversold territory, and short sellers are urged to book profits at current levels, according to a statement from Tips2trades.
Akshay Ashok – “Although AUM growth in the business update was slightly below expectations, customer acquisition momentum remains intact, and the company is on track to achieve target of acquiring 10-11 million customers in 2023,” said research analyst Prabhudas Lilladher. Increased stickiness of new to franchise customers (NTF) will contribute to incremental portfolio growth in the upcoming quarters.
Rahul Malani, According to the Banking & NBFC, Fundamental Research, Sharekhan analyst of BNP Paribas, “Bajaj Finance announced its Q3FY23 business updates wherein AUM growth was stated as 27% YoY/6% QoQ vs. 31% YoY/7% QoQ in Q2FY23.
If we go back to pre-covid era, BAF recorded an AUM growth rate of about 37% CAGR over the previous ten years. It was the lender with the fastest growth rate, and growth differences from banks and other NBFCs were also significant.
BAF has been reporting 25–30% increase in AUM during the post-pandemic period, and growth differentials have also decreased as a result of banks and other NBFCs’ and banks’ acceleration of loan growth.
As new companies (Jio Fin) and established fintech players (such as BAF) enter the consumer market that BAF serves, concerns have also been raised about intense rivalry developing in the future. It is currently trading for 6.4 times the book value for the next year.
Regarding the long-term investment thesis, we still believe that BAF is well-positioned to deliver strong, industry-leading ROA/ROE of 4.7%/ 4.8% 22%/33% in FY24E/FY25E thanks to its franchise built around strong competitive moats that are hard to replicate as well as strong execution capabilities, underwriting, and data analytics. We continue to be optimistic about the franchise’s future success and high earnings growth.