Tremendous rise in shares of Bajaj Finance and Bajaj Finserv, brokerage firm Citi suggested buying

On January 2, amid a huge rally in the Indian stock market, there was a strong rise in the shares of two major companies of Bajaj Group—Bajaj Finance and Bajaj Finserv. On Thursday, the fourth day of the week, shares of these two companies registered a gain of more than 8%.

Share performance of Bajaj Finance and Bajaj Finserv

• Bajaj Finserv:
  • The stock touched a high of ₹1,717.45 during trading.
  • Its 52-week high is ₹2,029.
• Bajaj Finance:
  • The share reached the level of ₹7,428.
  • Its 52-week high is ₹7,829.95.

Bajaj Finance: Brokerage firm Citi’s target price

Citi, a leading brokerage firm, has set a target price of ₹8,150 for Bajaj Finance and gave it a “buy” rating.

• Potential Increase:
  • This indicates a potential rise of up to 15% from current levels.
• Credit Cost:
  • Citi expects credit costs to rise modestly between 2.2%-2.25% during the December quarter.
• Assets Under Management (AUM):
  • AUM is estimated to grow 6% sequentially and 27% year-on-year in the December quarter.
• Net Interest Margin (NIM):
  • A positive growth of 3-5 basis points is expected in NIM.

Citi’s opinion on the performance of Bajaj Finance

According to Citi, Bajaj Finance has reduced risk by cutting its segments.

• Reduction in stressed areas:
  • The risk has been managed by reduction in two-wheeler and three-wheeler financing.
• financial stability:
  • The company has shown good management through its strategy and focus.

Change management: an important aspect

Citi stressed that an update on potential changes in the company’s management would be important.

• Analysts Rating:
  • Of the 36 analysts covering Bajaj Finance:
    • 26 gave “buy” rating.
    • 6 gave “Hold” rating.
    • 4 gave “Sell” rating.

What should investors do?

1. Buy Bajaj Finance:
   • According to brokerage firm Citi, buying at current levels could give long-term benefits.
2. Keep an eye on Bajaj Finserv:
   • Its stock is currently below its 52-week high, but there is a possibility of a strong performance.
3. Management Update:
   • Updates regarding changes in management can be decisive for investors.