BAJFINANCE - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.8
| Stock Code | BAJFINANCE | Market Cap | 5,83,372 Cr. | Current Price | 937 ₹ | High / Low | 1,102 ₹ |
| Stock P/E | 34.4 | Book Value | 166 ₹ | Dividend Yield | 0.47 % | ROCE | 11.1 % |
| ROE | 17.7 % | Face Value | 1.00 ₹ | DMA 50 | 918 ₹ | DMA 200 | 936 ₹ |
| Chg in FII Hold | -0.16 % | Chg in DII Hold | 0.24 % | PAT Qtr | 4,840 Cr. | PAT Prev Qtr | 3,750 Cr. |
| RSI | 57.8 | MACD | 9.49 | Volume | 2,93,36,023 | Avg Vol 1Wk | 1,26,58,535 |
| Low price | 788 ₹ | High price | 1,102 ₹ | PEG Ratio | 1.91 | Debt to equity | 3.13 |
| 52w Index | 47.4 % | Qtr Profit Var | 22.8 % | EPS | 28.6 ₹ | Industry PE | 18.2 |
📊 Financials: BAJFINANCE shows solid fundamentals with ROE at 17.7% and ROCE at 11.1%. EPS stands at ₹28.6, supported by strong quarterly PAT growth of 22.8% (₹4,840 Cr. vs ₹3,750 Cr.). Debt-to-equity ratio is high at 3.13, typical for NBFCs, but leverage risk remains. Dividend yield at 0.47% provides minor shareholder return.
💹 Valuation: The stock trades at a P/E of 34.4 compared to the industry average of 18.2, indicating stretched valuations. The PEG ratio of 1.91 suggests growth is not fully aligned with valuation. Book value is ₹166, giving a P/B ratio of ~5.6, which is expensive relative to peers. Current price of ₹937 is near its DMA levels, offering balanced technical positioning.
🏢 Business Model & Competitive Advantage: BAJFINANCE operates in consumer finance and lending, benefiting from scale, diversified loan portfolio, and strong brand presence. Its competitive advantage lies in consistent profit growth and institutional support. However, high leverage and premium valuations limit near-term attractiveness.
🎯 Entry Zone: A favorable entry zone lies near ₹890–₹910 (close to 50 DMA support). Current price of ₹937 is slightly above comfort levels, suggesting cautious positioning for fresh entry.
📈 Long-Term Holding Guidance: Suitable for long-term investors given strong fundamentals and growth momentum. Holding is justified with partial allocation, while profit booking near ₹1,020–₹1,050 resistance is advisable.
Positive
- Strong ROE (17.7%) and consistent profitability
- Quarterly PAT growth of 22.8%
- EPS at ₹28.6 supports earnings visibility
- DII holdings increased (+0.24%), showing domestic institutional confidence
Limitation
- High P/E (34.4) vs industry average (18.2)
- P/B ratio ~5.6 indicates premium valuation
- High debt-to-equity ratio (3.13) adds leverage risk
- Dividend yield remains modest at 0.47%
Company Negative News
- FII holdings declined (-0.16%), showing reduced foreign investor confidence
- Valuations remain stretched compared to peers
Company Positive News
- Quarterly PAT improved significantly to ₹4,840 Cr.
- DII holdings increased (+0.24%), providing institutional support
Industry
- NBFC sector trades at industry P/E of 18.2
- Sector outlook remains positive with rising consumer credit demand
Conclusion
⚖️ BAJFINANCE is a fundamentally strong NBFC with consistent profit growth and solid ROE, but valuations are stretched and leverage remains high. Entry is advisable near ₹890–₹910. Long-term holding is justified with partial allocation, while profit booking near ₹1,020–₹1,050 resistance is recommended.