Shares of Bajaj Finance emerged as the top Nifty gainer on Wednesday, as it recorded a growth of 4%. This came after the company reported a strong increase in new loans and AUM for the fourth quarter of FY23. According to the filing, their customer franchise had increased by 11.5 million by the end of the fiscal year, while the core AUM grew by 29% and liquidity surplus stood at around Rs 11,850 crore.
The non-banking finance company also experienced a 45% YoY growth in deposit book to Rs 44,650 crore and continued to remain well capitalized with a Capital Adequacy Ratio at 24.9%. Moreover, both their mortgage and B2B sales finance segments saw an increase in growth post festive season. The company expects about 26-27% growth, alongside potential 1-2% improvement due to new initiatives.
Morgan Stanley has retained its ‘overweight’ stance on Bajaj Finance, with expectations of 40% upside. This was backed by domestic brokerage Geojit which observed that the company has tailwinds such as strong cash flow and steady asset quality, making them well-positioned to generate strong performance in the future.
Commenting on the stock, Bajaj Finance’s MD, Sanjiv Bajaj, said that the operations have remained resilient throughout the pandemic, which has bolstered customer confidence. He added that their credit cost are expected to remain low, whilst the reducing competitive intensity has helped them better their margin growth.