Bajaj Finance: Bajaj Finance has topped the Largecap shares in the last 10 years and 15 years in giving returns.
Bajaj Finance Share:
Bajaj Finance has been at the forefront of giving returns during the last 10 years and 15 years in Largecap shares. But this year, due to COVID 19, consumer sentiments have not been normalized yet. The September quarter figures are definitely better than the June quarter but are far below the pre COVID level. Actually, due to COVID 19, there is still a situation of uncertainty, due to which the consumer sentiment has deteriorated. Consumption is still weak, people are avoiding extra shopping. At present, the fundamentals of this millionaire’s share have also weakened due to these reasons.
The number of new loans decreased in the September quarter
The September quarter data of Bajaj Finance has seen a clear impact of the coronavirus epidemic. Bajaj Finance has given 36 lakh new loans in the September quarter. But it is less than half of the same quarter a year ago. Business volume in terms of the loan disbursement and new customers are at 50–60 per cent level on an annual basis. Loan disburses have reduced by 45 per cent on an annual basis. Bajaj Finance’s new loan book stood at 17 lakh during the April to June quarter.
At the same time, the asset under management of Bajaj Finance grew by 1.3 percent in this quarter. Consumer B2C and SME lending is sluggish. While there has been a 9 per cent growth in the liquidity on the balance sheet on a quarterly basis, the deposit book has grown 5 per cent on a quarterly basis to 21600 crores. Bajaj Finance’s AUM growth was just 7 per cent in the June quarter, the slowest growth in 10 years.
Millionaire shares have been for investors
Talking about Bajaj Finance, it has long been a millionaire share for investors. It has rewarded shareholders for a period of 15 years and 10 years.
Talking about 15 years, the stock has given 12307 percent return to investors. During this period (October 2005 to October 2020), the share price rose from Rs 28 to Rs 3474. That is, investors’ money has increased 124 times in 15 years.
At the same time, the stock rose from Rs 76 to Rs 3474 in the last 10 years. That means investors’ money has increased 44 times. 4278 per cent returns were given as per percentage.
There will be pressure on the stock ahead!
Brokerage house MK Global has set a target of Rs 2950, recommending a hold in the stock. Brokerage house Motilal Oswal has also kept a neutral rating for the stock. There is a recovery in the September quarter, but the brokerage says the decline in disbursement volumes is disappointing, as peer companies such as HDFC are seeing a healthy trend. The brokerage believes that there may be another quarterly pressure on the company. EPS assessment for FY21 / FY22E has been reduced by 8% / 4%. According to the brokerage, everything will be normal with the company in the next fiscal.
(Disclaimer: This information is based on the information given by the company and the performance of the stock. We are not recommending investing in shares here. Invest only after consulting the experts, considering the risk of the market.)
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