Bajaj Finance Stock Plummets 2% On Weak Q2 Updates, Sluggish AUM Growth

The stock price of Bajaj Finance plummeted over 3 per cent in the Friday trading session after the non-banking finance corporation (NBFC) shared its Q2 business update where the assets under management (AUM) growth remained lowest in the six quarters.

The stock of Bajaj Finance traded with 2 per cent loss at Rs 7,285 in the morning session on the National Stock Exchange (NSE). 
 

The NBFC company's AUM climbed 29 percent to Rs 3,73,900 crore in the July-September quarter compared to Rs 2,90,264 crore during the same period last year. Despite the increase in AUM volume, the growth remained muted compared with the last six quarters.

As of the September quarter, the customer franchise climbed significantly to 92.09 million from 7.66 crore during the base period of the previous fiscal year. The deposits book increased by 21 per cent to Rs 66,100 crore, while the new loans booked increased by 14 per cent to over 1 crore. However, as of Q2, net liquidity excess was Rs 20,100 crore.
 

Credit expenses will continue to be Bajaj Finance's primary focus in Q2, according to brokerage firm Nomura, which made this observation after the company's Q2 business report. 

"Any increase in FY25 credit cost guidance would be taken negatively by the market and vice-versa," said Nomura in a note. The brokerage issued the target price of Rs 7,500 and issued a ‘neutral’ call on Bajaj Finance stock.
 

However, the brokerage firm Morgan Stanley predicted that the management's confidence in the improvement of asset quality from Q3 would be the main focus in Q2. Nevertheless, Morgan Stanley believed that the analysis of how credit costs will develop going forward will continue to be monitored.

With a price target of Rs 9,000, Morgan Stanley issued a ‘overweight’ rating on Bajaj Finance stock with a potential upside of 21 per cent from the stock's last closing level on Thursday.