BAJFINANCE - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 4.3

Here’s an in-depth analysis of Bajaj Finance (BAJFINANCE) based on its fundamentals, valuation metrics, business strength, and investment potential

📊 Core Financials & Profitability

EPS: ₹28.1 — consistent with large-scale NBFC operations.

PAT Growth: ₹4,700 Cr (up 20.1%) — strong quarterly performance.

ROE: 19.2% — impressive return on equity for a financial institution.

ROCE: 11.4% — comparatively moderate due to the capital-heavy nature of lending businesses.

Debt-to-Equity: 3.74 — typical for NBFCs, though high leverage demands close monitoring.

Dividend Yield: 0.50% — low, reflecting a growth-oriented reinvestment policy.

💰 Valuation Metrics

P/E Ratio: 31.6 — slightly expensive vs industry PE of 25.2; market is pricing in growth.

P/B Ratio: ~5.7 (₹887 ÷ ₹156) — high, driven by confidence in future earnings.

PEG Ratio: 0.95 — favorable; suggests the stock is undervalued relative to expected earnings growth.

Intrinsic Value: Likely near current price; value investors may consider at dips.

🧠 Business Model & Strategic Edge

Segment: Lending (Consumer, SME, Commercial); digital-first NBFC leader.

Strengths

Strong tech infrastructure and digital ecosystem.

Low NPAs and robust asset quality management.

Diversified loan book with significant retail exposure.

Risks

High leverage.

Sensitivity to interest rate and regulatory changes.

Slight DII holding drop (–0.26%) could reflect rotational shift.

📉 Technical Indicators

RSI: 38.3 — entering oversold territory, potential bounce-back zone.

MACD: –3.44 — negative momentum still in play.

Volume: Below weekly average — muted trader interest short-term.

🎯 Recommended Entry Zone

₹850 – ₹880: Attractive near DMA 200 level; watch for stabilization signals like RSI bounce or MACD crossover.

Could also wait for consolidation near ₹840 for even safer long-term entry.

📈 Long-Term Holding Guidance

Bajaj Finance remains a strong pick for long-term wealth building

Digital leadership in lending space.

Scalable model with growing retail penetration.

Strong earnings track record and high market trust.

Ideal for a 3–5 year horizon, especially if India’s consumption cycle continues strengthening.

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