NBFC Giant Bajaj Finance Share Price Nears 52-Week High Ahead Of Q2 Numbers; What To Expect?

NBFC giant, Bajaj Finance traded broadly on a bullish note during Tuesday's session ahead of its Q2 numbers for FY24. This Bajaj Group-backed behemoth is expected to post healthy growth across verticles in the quarter. Overall, Bajaj Finance's share price traded closer towards its 52-week high.

At the time of writing, Bajaj Finance shares traded at Rs 8,112.80 apiece, up by Rs 80.05 or 1% on BSE. The market cap stood at Rs 4,91,566.97 crore.

In the early trade, the stock rallied by 1.61% with an intraday high of Rs 8,162 apiece on the exchange.

Overall, the stock is moving towards its 52-week high of Rs 8,190 apiece. While the stock price is trading up by nearly 48% from its 52-week low of Rs 5,487.25 apiece.

Giving a Q2 preview, Shreyansh Shah, Research Analyst, StoxBox said, "In its business update for Q2FY24, Bajaj Finance came out with strong numbers with new loan book addition at 26% YoY and AUM seeing a growth of around 33% on a YoY basis. Although the lender's cost of funds has increased due to the high-interest rate environment, we believe that new customer additions along with robust growth in its AUM will lead to healthy RoAs and RoEs in 2QFY24 as well as forthcoming quarters."

Further, Shah added, "With the launch of merchant QR code payments in FY23 and foray into new products, the company's top line is expected to grow at a robust pace. With the festive season, increased penetration in rural areas and sustained growth from urban areas, we believe that the company will come out with healthy numbers in Q2FY24."

Stoxbox analyst believes that the recent consideration by the board to raise funds of around Rs 8,000 crore will help the lender to be well placed in its capital adequacy for its future expansion plan. Bajaj Finance's diversified product mix, strong execution capabilities and around 55% towards secured loans make the lender's asset quality healthy.

Earlier this month, Bajaj Finance announced to raise Rs 10,000 crore through capital market instruments. Of the total, the company will raise Rs 8,800 crore through the issuance of Qualified Institutions Placement (QIPs) to institutional buyers. The equity shares offered in QIPs will have a face value of Rs 2 each.

While the rest of Rs 1,200 crore will be raised through preferential issues. Under this plan, the NBFC will issue up to 15,50,000 warrants convertible into an equivalent number of Equity Shares of face value of Rs 2 each. Promoter and holding company, Bajaj Finserv is the proposed allottee in the preferential issue.

During June 2023, the NBFC player reported consolidated profit after tax of Rs 3,437 crore, rising by 32% YoY, while its net interest income (NII) climbed 26% YoY to Rs 8,398 crore. Bajaj Finance also posted the highest-ever quarterly AUM growth of ₹ 22,718 crore in Q1, while it also added the highest-ever new customer of 3.84 million to the franchise.

In the quarter, new loans booked were up 34% to 9.94 million in Q1 as against 7.42 million in Q1 FY23, the highest ever new loans in a quarter. B2B disbursements were up 37% at ₹ 22,625 crore as against ₹ 16,502 crore in Q1 FY23. Further, deposits book grew by 46% YoY and stood at ₹ 49,944 crore as of 30 June 2023. In Q1, net deposit growth was ₹5,278 crore. Deposits contributed to 21% of consolidated borrowings as of 30 June 2023.

Earlier while announcing Q1 results, Bajaj Finance announced that it estimates AUM growth to be in the range of 29-31% for FY24. While it is confident to add 12-13 million new customers by the end of the financial year 2023-24.