Bajaj Finance share price soared to new highs in yesterday’s trading session. Bajaj Finance share price closed at Rs 6086.4, up Rs 412 or 7.3%. Bajaj Finance Share price made LIFE HIGHS of Rs 6115 on Thursday, June 10. Bajaj Finance Market cap is Rs 3.67 lk cr now. Bajaj Finance 52-week low is Rs 2199. BofA Securities is BULLISH on this giant NBFC and confident about the future growth prospects of the company.
BofA Securities hosted Rajeev Jain, MD, Bajaj Finance for an investor call. The majority of investor questions were focused on Bajaj Finance’s elaborate ‘Business Transformation’ project which is expected to go live by early-Oct ’21 with significant optimization over the remainder of FY22.
See Zee Business Live TV Streaming Below:
The technology platform will allow Bajaj Finance to achieve the twin objectives of:
(i) Capturing a larger wallet share of 26.9 mn cross-sell customers with improved customer engagement and reduced customer friction – 33% of the app ecosystem is targeted at improving servicing
(ii) Target 90mn+ prospective customers with high (80%+) approval rates, while reducing costs by introducing nonlinearity between income and opex
In addition, it will significantly enhance Bajaj Finance’s capability to offer hyper local offers which along with an integrated Rewards management system (including vouchers) will allow Bajaj Finance to capture a higher sales share of its 110k+ merchant partners. BofA Securities understands that the new tech platform entails a single app sign in to access Bajaj Pay, 5 market place apps and 28-30 affinity apps. BofA Securities believes that the technology platform will further accelerate BAF’s growth trajectory and market share gains, with strong positive operating leverage. Reiterate Buy Rating on Bajaj Finance with price target of Rs 6290.
Bajaj Finance Worst of lockdown impact behind; strong pick up in June month:
Bajaj Finance reiterated that the financial impact of COVID 2.0 has been much milder vs the first wave with Bajaj Finance remaining open for business across all categories. While May’21 bore the full impact of localized lockdowns with business volumes declining to 40-60% of planned levels, the pick-up in early Jun’21 (especially in high frequency B2B business) has been strong with Bajaj Finance hoping to reach 75-80% of Mar’21 levels post 14th Jun’21 with full normalization by early July. Bajaj Finance also reiterated that Rs 11-13 bn of incremental credit cost guidance for FY22 is driven primarily by higher stress in 2W/3W portfolio with credit performance of Flexi portfolio remaining in line with the rest of the portfolio.
Bajaj Finance Company Description:
Incorporated in 1987, Bajaj Finance, a part of the Bajaj Group, is the largest non-banking financial company in India. With an FY20 AUM of Rs 1472 bn and a customer base of over 42mn, BAF offers consumer lending (2W/3W, consumer durables, digital products, lifestyle products, personal loans), SME lending (working capital loans), commercial lending, rural lending (consumer durables, digital products, personal and gold loans) and mortgage lending, catering primarily to individuals and SMEs.