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Bajaj Finance Shares Surge: Analysts Remain Bullish with Target Prices as High as Rs 9,500

February 21, 2025
Smart Money

Bajaj Finance Shares Surge Amid Positive Market Sentiment

BSE Performance Highlights

Bajaj Finance shares saw a significant jump today, climbing 5.8% on the Bombay Stock Exchange (BSE) to reach an intraday high of Rs 7,339.9 per share. This rally positioned Bajaj Finance as the top gainer in the Sensex, reflecting favorable market conditions as the index itself surged over 1,000 points, trading at an impressive level of 79,520 around 1:00 PM.

In conjunction with Bajaj Finance, Bajaj Finserv shares also witnessed a remarkable performance, soaring 8.9% to hit an intraday peak of Rs 1,717.45 per share, highlighting strong investor interest in the Bajaj Group’s financial services.

Citi’s Bullish Outlook

Market analysts have pointed to a bullish outlook from global brokerage firm Citi, which has initiated a ’90-day catalyst watch’ for Bajaj Finance shares. Citi appears to maintain a positive stance on the stock by reiterating a ‘Buy’ rating with an ambitious target price set at Rs 8,150. According to Citi’s analysis, while credit costs may see a slight rise to 2.2-2.25% for Q3, the company is expected to achieve a quarterly growth in assets under management (AUM) of 6% and a year-on-year increase of 7%. This growth is likely driven by diverse segments such as mortgages, sales financing, securities lending, and new business ventures.

Bajaj Finance’s Position in the Market

Bajaj Finance is recognized as one of India’s foremost non-bank finance companies (NBFC), engaging in a wide range of lending activities and accepting deposits. Its diversified lending portfolio encompasses retail, small and medium enterprises (SMEs), and commercial customers, which positions it well for continued growth.

Despite only a modest 4% gain over the past month—a contrast to a 1% decline in the Sensex index—Bajaj Finance has shown resilience. The stock touched a 52-week high of Rs 7,830 per share on January 9, 2024, and reached an all-time high of Rs 8,190 on October 6, 2023. The company currently boasts a substantial market capitalization of Rs 4.4 trillion.

Financial Performance and Analyst Views

Analysts have expressed confidence in Bajaj Finance’s future prospects, predicting that earnings growth will gradually align with asset growth—expected to be facilitated by a decline in credit costs and steady net interest margins (NIMs) through FY26, particularly with an improving outlook for the latter half of FY25. Mirae Asset Sharehan has retained a ‘Buy’ rating on Bajaj Finance shares following Q2 results, adjusting their price target to Rs 9,500. They noted a robust year-on-year growth in net profit, which increased by 13% reaching Rs 4,013 crore, alongside a solid AUM growth of 28.8% year-on-year, bringing it to Rs 373,924 crore. Additionally, net interest income (NII) surged by 28%, climbing to Rs 14,987 crore.

As Bajaj Finance continues to adapt to the dynamic financial landscape, its recent performance and strategic insights from analysts may set a positive tone for investors looking for growth opportunities in the financial sector.