BAJFINANCE - Investment Analysis

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

Investment Rating: 4.4

Let’s unpack Bajaj Finance (BAJFINANCE) as a long-term investment candidate based on a blend of fundamental and technical indicators

💼 Fundamental Strength

Growth Metrics

ROE: 19.2% is solid, indicating healthy shareholder returns.

PEG Ratio: 0.95 suggests the stock isn't overpriced relative to its earnings growth—impressive for a high-momentum NBFC.

Profitability

PAT Growth (QoQ): +20.1% confirms acceleration in profitability.

EPS: ₹28.1, though modest, is improving consistently.

Valuation

P/E: 31.6 is on the higher side compared to industry average of 25.2, but justified by growth momentum.

Book Value: ₹156 vs Current Price ₹887 — shows premium valuation.

Dividend Yield: 0.50%

Not significant, but that’s expected for a growth-focused lender.

Leverage

Debt-to-equity: 3.74 is high. Typical for NBFCs, but it warrants monitoring in volatile credit environments.

📈 Technical & Price Trend Insights

Current Price: ₹887

Trading below DMA-50 ₹921, but above DMA-200 ₹846 — mild short-term weakness with long-term support intact.

RSI at 38.3 indicates near-oversold territory.

MACD -3.44 suggests bearish momentum.

🟢 Ideal Entry Zone: ₹840–₹865 This zone balances valuation support with potential price reversal based on RSI & MACD trends.

🛡️ Exit Strategy / Holding Period

If you already hold the stock

📌 Hold for 5+ years to ride secular growth in financial services and fintech lending.

Use any rally >₹975 as a trimming opportunity if valuation multiples stretch beyond sustainable levels.

Keep a watch on

Debt trends and interest rate impact on NBFCs.

PEG ratio trending above 1.2 without corresponding EPS momentum.

Institutional sell-off (particularly DII which dipped -0.26%).

🧾 Summary

Bajaj Finance is a high-growth, premium-valued NBFC with impressive fundamentals and a favorable PEG ratio. While it has elevated leverage and dividend yield is low, the profit trajectory and ROE/ROCE ratios support a long-term case. The ₹840–₹865 range could be an attractive accumulation zone. For current holders, it's a "sit-tight and monitor" play with a 3–5 year lens.

Would you like to add HDFC or another sectoral stock next for comparison? We could build a diversified long-term plan together.

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