Bajaj Finance Share Price Target Based on Financial Projections and Market Indicators

Based on its financial performance, Bajaj Finance has consistently shown a high growth rate, with a compound annual growth rate (CAGR) of 30% over the past five years.

The company's strong financial position, with a net worth of ₹54,000 crores and a return on equity (RoE) of 24.5%, indicates its ability to sustain growth and pay dividends.

Its robust asset quality, with a gross non-performing asset (GNPA) ratio of 1.44%, reflects the company's effective risk management and credit assessment processes.

Bajaj Finance's diversified business model, which includes lending, asset management, and life insurance, provides a stable revenue stream and reduces dependence on any single business segment.

To determine the share price target of Bajaj Finance Limited, let's first analyze its performance. The company's shares have shown a significant capital gain.

Looking at the capital gain, we can see that it's a crucial factor in determining the share price target. Bajaj Finance Limited's shares have a notable capital gain.

Dividend return is another essential aspect to consider when evaluating the share price target. The dividend return of Bajaj Finance Limited's shares is substantial.

A total return of Bajaj Finance Limited's shares is a key indicator of its performance. The total return is a combination of capital gain and dividend return, and it's essential to consider it when setting a share price target.

Bajaj Finance has reported a 33.4% YoY increase in PAT to Rs 137,439 million in FY24, with a projected growth to Rs 188,649 million by FY26, representing a 23.3% CAGR.

The company's Net Interest Income (NII) is expected to grow from Rs 269,393 million in FY24 to Rs 405,730 million in FY26, while EPS is projected to increase from Rs 222.4 in FY24 to Rs 305.3 in FY26.

The company's Return on Assets (RoA) and Return on Equity (RoE) are projected to stabilize at 5.2% and 20.3%, respectively, by FY26.

Bajaj Finance reported a 33.4% year-over-year increase in PAT (Profit After Tax) in FY24, reaching Rs 137,439 million.

The company's Net Interest Income (NII) is projected to grow significantly, from Rs 269,393 million in FY24 to Rs 405,730 million in FY26.

EPS (Earnings Per Share) is expected to increase from Rs 222.4 in FY24 to Rs 305.3 in FY26, representing a robust growth trajectory.

Return on Assets (RoA) is projected to stabilize at 5.2% by FY26.

Return on Equity (RoE) is also projected to stabilize at 20.3% by FY26.

The company expects further growth in PAT, reaching Rs 188,649 million by FY26.

Here's a summary of the company's financial projections:

Bajaj Finance entered the co-branded credit card segment in 2016, leveraging its 16 million-strong customer base.

This move allowed the company to tap into a new revenue stream, with upfront sourcing fees and annuity fees boosting fee income to 1% of average assets under management (AUM) by FY20.

The strategic pivot included onboarding DBS Bank as a co-branding partner in 2022, which helped maintain steady fees and commissions at ~2.8% of AUM over the past five quarters.

Despite a decline in new customer acquisitions under the RBL partnership, from 100,000 monthly cards to 30,000–40,000, the overall fees and commissions have remained steady.

Bajaj Finance has consistently shown a strong growth in its net interest income, with a CAGR of 25.6% from FY 2016 to FY 2020.

The company's net interest margin (NIM) has also been steadily increasing, reaching 14.7% in FY 2020, up from 12.4% in FY 2016.

Bajaj Finance's non-interest income has also been growing, with a CAGR of 23.4% from FY 2016 to FY 2020.

The company's total asset base has grown from ₹43,441 crore in FY 2016 to ₹1,23,919 crore in FY 2020, a growth of 184%.

Bajaj Finance's loan book has been growing at a CAGR of 24.5% from FY 2016 to FY 2020.

The company's asset quality has been improving, with the gross non-performing assets (GNPA) ratio decreasing from 1.4% in FY 2016 to 1.1% in FY 2020.

Bajaj Finance's return on equity (ROE) has been consistently high, reaching 24.1% in FY 2020, up from 16.5% in FY 2016.

The company's dividend payout ratio has been around 40% in recent years, indicating a conservative approach to dividend distribution.

Bajaj Finance's market capitalization has grown from ₹18,341 crore in FY 2016 to ₹1,34,919 crore in FY 2020, a growth of 638%.

Bajaj Finance is a top pick among brokerage firms, with its share price rising nearly three and a half percent in Monday's intraday trade to become the top gainer on the Nifty50 and the 30-shares Sensex.

The company's healthy numbers in the July-September quarter of the current fiscal have not been enough to stop its downtrend.

Bajaj Finance is covered by 63 analysts, with 29 of them submitting estimates of revenue or earnings used as inputs to reports.

Here are some of the analysts who have covered Bajaj Finance:

Bajaj Finance shares jumped 3.5% on Monday after the company announced plans to raise funds through preferential issuance of shares and qualified institutional placement (QIP).

The stock gained by Rs 264.5, touching Rs 7,737 apiece at the strongest level of the day.

This move marks a four-year gap since the company last raised capital, indicating stronger-than-expected medium-term loan growth.

The fundraising will help Bajaj Finance drive its long-term growth.