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Bajaj Finance is a nonbanking financial company that operates in the segment of financial services in India. The company provides various loans such as home loans, personal loans, business loans, and others. Bajaj Finance is also known as India’s largest NBFC and it is a subsidiary of Bajaj Finserv. The company started in 1987 and has performed well to establish itself as a market leader since then. Consumer EMIs are one of the largest revenue generators for Bajaj Finance.
Ratios of Bajaj finance
P/E Ratio of Bajaj finance
The P/E ratio of Bajaj Finance stood at 35.19, whereas the industry P/E is at 24.64. The stock is slightly overpriced because paying 35 times more than what the stock is earning is risky
P/B Ratio
The price-to-book ratio of Bajaj Finance is at 7.06
ROCE and ROE
The ROE is at 10.81% and the ROCE is at 16.43%.
Market cap
Bajaj Finance has the highest market cap in its segment. The overall market cap is at 3.4 lakh crore
Income growth
In the last five years the income has grown to 22.86%, for 3 years it is 17%, and in the last year, it is 18.46%.
Profit growth
The profit growth is spectacular for a company this large. In the last five years, the company has grown to 28.16%, for 3 years it is 17.74%
And in the last five years, it has been 60.55%.
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The share price target for 2023, 2025, and 2030
Bajaj Finance makes revenue from the different services it provides to its clients. The company’s majority of income earned the interest on loans it gives to the public. The company has total assets of 1.6 lakh crores approximately as of March 2022.
Bajaj Finance share price 2023
There is a steady decrease in the company’s NPA from its loan book. In terms of growth, Bajaj Finance is highly benefited from the demand for consumer goods and uneasy loans from the public banks
The stock price of Bajaj Finance for the year 2023 would be 6,200 to 6,289
Bajaj Finance share price Target 2025
The promoters hold more than 50% of the shares in Bajaj Finance. The company has average ROE credentials. The current ROE is at 16.43% which is fair enough over the threshold of 15%. EPS(Earning per share) is a key metric to measure for any company for analyzing the efficiency of the company in making money per share. The company has a 60% YOY growth.
The stock price of Bajaj Finance for the year 2023 would be 8,215 to 8,860
Bajaj Finance share price Target 2030
Bajaj Finance is the largest lender in the burgeoning consumer finance segment in India. It is the front runner in providing interest fee EMI options in different categories from consumer durables to electronics.
Some of its services
Consumer Finance
Durable Finance
Lifestyle Finance
Digital Product Finance
EMI Card
2 & 3 Wheeler Finance
Personal Loan
Loan against FD
Extended warranty
Gold Loan
Home Loan
Retail EMI
Retailer Finance
E-commerce
Co-branded Credit Card
Co-branded Wallet
SME Finance
Home Loan
Loan against Property
Gold Loan
Lease rental discounting
Business Loan
Loan Against Shares
Professional Loan
Working Capital Loans
Developer Finance
Used Car Finance
Commercial Lending
Vendor Financing
Large Value Lease Rental Discounting
Loans against Securities
Financial Institutions Lending
Light Engineering Finance
Corporate Finance
Warehouse Financing
Investment
Fixed Deposit
Mutual Funds
The stock price of Bajaj Finance for the year 2030 is 15,230 to 16,269
Swot analysis
Strengths:
Strong Brand: Bajaj Finance is a well-known brand in India, which enjoys a good reputation for its range of financial products and services.
Diversified Product Portfolio: Bajaj Finance offers a diverse range of financial products, including loans, insurance, and investments, which reduces its dependency on a single product.
Wide Distribution Network: Bajaj Finance has a vast distribution network with over 3,500 branches and more than 60,000 touchpoints in India, which allows it to reach a larger customer base.
Customer-Centric Approach: Bajaj Finance has a customer-centric approach, which is reflected in its customized financial products and services that cater to the specific needs of its customers.
Strong Financial Performance: Bajaj Finance has consistently delivered a strong financial performance with a high return on equity, net interest margin, and asset quality.
Weaknesses:
Exposure to Risky Sectors: Bajaj Finance has significant exposure to the consumer durables and unsecured personal loan segments, which are considered high-risk areas in the Indian financial market.
Dependency on Wholesale Funding: Bajaj Finance depends heavily on wholesale funding, which exposes it to the risk of market fluctuations.
Limited Geographical Presence: Bajaj Finance has a limited geographical presence outside India, which limits its growth potential.
Reliance on Bajaj Group: Bajaj Finance is a subsidiary of the Bajaj Group, which creates a dependency on the group’s overall performance.
Opportunities:
Growing Indian Financial Market: India’s financial market is growing rapidly, and Bajaj Finance can tap into this growth by expanding its product offerings and geographical reach.
Technological Advancements: Technological advancements, such as digitalization, mobile banking, and artificial intelligence, present opportunities for Bajaj Finance to improve its customer experience and increase efficiency.
Increase in Retail Borrowing: With the rise in consumer demand, there is an opportunity for Bajaj Finance to expand its retail borrowing products and services.
Collaborations and Partnerships: Bajaj Finance can collaborate with other companies to increase its customer base and offer more diversified financial products and services.
Threats:
Regulatory Changes: Changes in the regulatory environment, such as interest rate changes, capital requirements, and new regulations, can affect Bajaj Finance’s operations and profitability.
Intense Competition: Bajaj Finance faces intense competition from other financial institutions in India, which could impact its market share and profitability.
Economic Slowdown: Economic slowdowns or recessions could lead to a decrease in demand for Bajaj Finance’s financial products and services.
Cybersecurity Risks: With the increased use of technology, Bajaj Finance is vulnerable to cybersecurity risks, such as data breaches, which could lead to reputational damage and financial losses.
Conclusion
Bajaj Finance is the consumer king in providing easy EMIs and loans to institutions. Their network is such that they only provide the electronics along with the east interest fee EMI options.
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The stock price of Bajaj Finance for the year 2023 would be 8,215 to 8,860.
The stock price of Bajaj Finance for the year 2023 would be 6,200 to 6,289