BAJFINANCE - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

🧠 How I’m Thinking About This

You’re asking for a full-spectrum fundamental analysis of Bajaj Finance Ltd, one of India’s most admired NBFCs. I’m evaluating its financial strength, valuation metrics, business model, and technical indicators to determine its long-term investment potential and ideal entry point.

📊 Core Financials Breakdown

Profitability & Growth

EPS: ₹28.0 — solid earnings base

PAT Qtr: ₹4,133 Cr vs ₹3,940 Cr — +21.5% QoQ, strong growth momentum

ROE: 18.5%, ROCE: 11.5% — healthy return metrics for a lending business

Revenue CAGR (5Y): ~26% — consistent top-line expansion

Balance Sheet Strength

Debt-to-equity: 3.13 — typical for NBFCs, well-managed

Book Value: ₹142 — price-to-book ratio ~7.03, premium valuation

Dividend Yield: 0.44% — modest, reflects reinvestment focus

💰 Valuation Indicators

Metric Value Interpretation

P/E Ratio 40.4 Overvalued vs industry PE of 24.0

P/B Ratio ~7.03 High premium to book value

PEG Ratio 1.25 Fair — valuation justified by growth

Intrinsic Value ~₹950–₹980 Trading slightly above fair value

Valuation is elevated but supported by strong earnings growth and brand premium.

🏦 Business Model & Competitive Edge

Industry: Consumer finance — high growth, tech-driven

Moat: Digital-first lending, diversified product suite (EMI cards, Flexi loans), strong analytics

Catalysts

Expansion into payments and deposits

Low NPAs (Gross NPA: 0.85%, Net NPA: 0.37%) — excellent asset quality

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5-year TSR: 217% — strong shareholder value creation

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Bajaj Finance is a benchmark for digital transformation in Indian financial services.

📉 Technical & Entry Zone

Current Price: ₹998

DMA 50/200: Trading above both — bullish trend

MACD: +28.8 — positive momentum

RSI: 70.1 — nearing overbought zone

📌 Suggested Entry Zone: ₹950–₹980

This range offers a better margin of safety and aligns with intrinsic value estimates.

🕰️ Long-Term Holding Guidance

Hold if already invested — fundamentals are outstanding

Buy on dips near ₹960 for long-term compounding

2026 Target Price: ₹1,200–₹1,350 based on projected earnings and digital expansion

⭐ Fundamental Rating

4.6

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moneymintidea.com

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simplywall.st

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