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February 22, 2025
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Bajaj Finance share price rallies over 4% after Q3 results. Should you buy the NBFC stock?


Bajaj Finance share price rallied over 4% in early trade on Thursday after the company reported its Q3 results. Bajaj Finance shares gained as much as 4.52% to 8,108.90 apiece on the BSE.

The largest NBFC India, Bajaj Finance reported a 17% growth in consolidated net profit for the third quarter of FY25 at 4,247 crore as against 3,639 crore in the year ago period.

The net interest income (NII) in Q3FY24 increased by 23% to 9,382 crore from 7,655 crore, year-on-year (YoY).

Bajaj Finance’s Assets under management (AUM) grew by 28% to 398,043 crore as of 31 December 2024 from 310,968 crore as of 31 December 2023. The number of new loans booked in Q3FY25 was highest ever at 12.06 million as against 9.86 million in Q3FY24, a growth of 22%.

The NBFC’s gross non-performing assets (GNPA) rose to 1.12% in Q3FY25 from 0.95% a year earlier, while Net NPA rose to 0.48% from 0.37%. The provisioning coverage ratio on stage 3 assets stood at 57%.

Provisions for loan losses increased to 2,043 crore in Q3FY25 from 1,248 crore a year ago. Loan losses and provisions stood at 2.16% of average assets under finance.

Should you buy Bajaj Finance shares?

“Bajaj Finance logged a strong quarter, with PAT of 43 billion exceeding consensus and our estimates by ~6% and ~3%, respectively. Credit costs were stable sequentially at ~2.1%, with the management expecting improvement in Q4 due to better collection efficiency observed in December 2024 and January 2025, and maintained full-year FY25 guidance at 2-2.1%,” said Avinash Singh, Senior Research Analyst at Emkay Global Financial Services Ltd.

Given its strong financials — with ~4% RoA, above-20% RoE, and sustained earnings growth above 20% — and incorporating the Q3 developments and management insights, Emkay Global revised its FY25-27 estimates, leading to a ~2.5% upward revision in earnings.

The brokerage firm reiterated a ‘Buy’ rating on Bajaj Finance stock, and raised its December target price by 5% to 8,800 per share from 8,400 earlier, implying FY26E P/BV of 5.2x on a standalone basis.

Bajaj Finance share price has gained 17% in one month and more than 18% in six months. The stock has rallied 35% in two years.

At 9:20 AM, Bajaj Finance shares were trading 3.51% higher at 8,030.45 apiece on the BSE.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.



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