[Infographics] Bajaj Finance | Why we love Bajaj Finance (Quick report)

Bajaj Finance Limited is a non-banking finance company (NBFC). The Company is engaged in the lending and allied activities. Bajaj Finance is a subsidiary of Bajaj finserv ltd. The company deals in consumer finance, SMS (small and medium-sized enterprises), commercially lending, and wealth management.

Bajaj Finance is mainly engaged in the business of lending. BFL has a diversified lending portfolio across retail, SME, and commercial customers with a significant presence in urban and rural India. It also accepts public and corporate deposits and offers a variety of financial services products to its customers.

Reasons why Bajaj Finance is very popular in the NBFC sector

Largest NBFC in India

Bajaj Finance (BFL) started its journey in the year 1987 as a vehicle financing company and now is one of the largest NBFC in India. It has more than 1,47,100 Cr of Assets under Management (AUM). BFL has a diversified lending portfolio and has a presence in various lending segments.

Largest Financier for Bajaj Auto

The company financed the purchase of over 1.1 million motorcycles and about 187,000 three-wheelers in FY20 for Bajaj Auto Ltd. This constituted over 54% of domestic sales of Bajaj motorcycles and 51% of domestic sales of Bajaj three-wheelers. The support from Bajaj Auto has enabled the company to get significant customers on day to day basis.

Pan India Presence

BFL has a total of 2814 branches spread across India out of which 1604 branches are based in Rural Areas and the rest from urban areas. The company has an overall distribution network of 1,02,800 active networks spread across India

Bajaj Finance Today

BAJAJ FINANCE LTD
BAJFINANCE.NS
₹ 6,997.25
1.32%
Marketcap
4.22T
Volume
₹ 2,194,971.00
Shares
603,593,984
Range
₹ 6,849.25 - ₹ 7,199.80
52 Week Range
₹ 4,362.00 - ₹ 8,050.00
BAJAJ FINANCE LTD
sector
Financial Services
industryCredit Services
addressPanchshil Tech Park, Pune, India
countryIndia
phone91 20 7157 6403
websitehttp://www.bajajfinserv.in/corporate-bajaj-finance
BAJAJ FINANCE LTD
₹ 6,997.25
Open ₹ 6,910.00
High ₹ 7,199.80
Marketcap 4.22T
Close ₹ 6,997.25
Low ₹ 6,849.25
Volume ₹ 2,194,971.00

Bajaj Finance Chart

Presence of Bajaj Finance in index

NIFTYALPHANIFTYSERVICENIFTY100WEIGHTNIFTYEQWGT
NIFTYFINANCENIFTY100NIFTY50NIFTY500
NIFTY200NI15LIQ15NSEQ30
NFTALQVL30NIFTYGR15NIFTYLGEMID250NIFTYHIGHBETA
NT100ALP30SENSEXBSE500BSE500
SNSX50BSE100FINBSE200
LMI250ALLCAPLRGCAPBSE100LARGECAPTMC
CARBONEXSPBSMOIPS&PDIVSTABLEESG100

Bajaj Finance Infographics

Bajaj finance infographics by Kamlesh Rode
Bajaj finance infographics by Kamlesh Rode created in Figma.com

Overview of Bajaj Finance

bajaj finance overview
  • Current price is more than intrinsic value of Bajaj finance stock. Investors do not favor such high intrinsic value stocks for investment opportunities.
  • Bajaj finance have very high returns than fixed deposits (FDs). This stock is generating better return on equity than bank fixed deposits.
  • Bajaj finance does not offer good dividend returns.
  • Today this stock is not in ASM/GSM lists and very few promoters have pledged their holdings.
  • Bajaj finance stock is among the top performers in growth score post covid-19 situations.

Key Metrics of Bajaj Finance stock

  • Price to earnings ratio is 106.53 is high
  • Sector PE is calculated by dividing its market capitalization by its total net profit. The sector or industry PE score of Bajaj Finance is 27.66, which is very good.
  • The PB ratio compares market’s capitalization or market value to its book value. PB ratio and sector PB of Bajaj Finance is 12.75 and 2.34 respectively.
  • Bajaj finance did not offered good dividend in the history. Sometimes this stock gave some dividend cash to the shareholders. Its dividend yield is only 0.13% and sector dividend yield is just 0.54% compare to its peers in the sector.

Key Metrics Table

PE RatioSector PEPB RatioSector PBDividend yieldSector dividend yield
106.5327.6612.752.340.13%0.54%

Read more about PE ratio with infographics | Read more about dividend and dividend yield with infographics

Financials of Bajaj Finance

Bajaj finance financials details

Income statements

Key Takeaways

1. Higher than the industry revenue growth
Over the last 5 years, revenue has grown at a yearly rate of 29.47%, vs industry avg. of 17.41%

2. Increasing market share
Over the last 5 years, market share increased from 13.5% to 22.02%

3. Higher than industry net income
Over the last 5 years, net income has grown at a yearly rate of 28.15%, vs industry avg. of 18.9%

Income Statement Table

Financial YearFY 2018FY 2019FY2020FY2021
Total Revenue12,756.8418,500.1826,385.6426,683.05
EBITDA3,945.516,323.317,616.756,317.53
PBIT3,843.446,179.167,322.125,992.26
PBT3,843.446,179.167,322.125,992.26
Net Income2,496.373,994.995,263.754,419.82
EPS44.5069.3689.4673.57
DPS4.006.0010.0010.00
Payout ratio0.090.090.110.14
*EPS and DPS in ₹. Other numbers except for Payout Ratio in ₹ crores

If you look at the Income statement of Bajaj finance, you will find that this stock company is continuously growing year by year.

We can see the past 4 years of the income statement of Bajaj finance, in the year 2018 the company had total revenue of 12,756 crores.

In the year 2019 total revenue increased to 18,500 crores which exceed more than 30% compared to the revenue in the year 2018.  

The year 2020 brought an almost 50% increase in revenue. It was the pre-covid-19 condition. During the covid-19 situation, the stock kept falling. It was felled from levels of 4800 to 1900. It was a huge virtual loss for the company and stockholders.

But the company hold their patience and ended the total revenue of 26,683 crore which is again 300 crores more than the year 2020 figures. That means the company perform better when the Nifty index was taking a blood bath

Balance sheet statistics of Bajaj finance.

Key Takeaways

1. Higher than industry debt to equity ratio
Over the last 5 years, the debt to equity ratio has been 441.37%, vs an industry avg. of 430.41%  
2. Lower than industry current ratio
Over the last 5 years, the current ratio has been 54.83%, vs industry avg. of 63.91%

Balance Sheet Table

Financial yearFY 2018FY 2019FY 2020FY 2021
Total Assets84,798.271,24,232.511,64,391.131,71,526.87
Total Liabilities68,950.431,04,535.491,32,063.501,34,608.46
Total Equity15,847.8419,697.0232,327.6336,918.41
Total Shares Outstanding57.5157.6959.9960.16
Shares outstanding numbers in cr. Other numbers in ₹ crores

You can see the growth of Bajaj finance company in the balance sheet table given above.

For the years 2018 and 2019, the balance was increased by more than 40,000 crores and in the next year 2020, it increased by more than 40,000 crores. It was pre-covid-19 data. But during Covid-19 conditions, this company managed to add more than 7,000 crores to the balance sheet.

Cash flow statistics of Bajaj Finance

A cash-flow statement is a report of the company’s cash management, which summarizes all cash inflows that the company receives from its operations and investment sources, as well as cash outflows involved in the functioning of the business and investments, if any, by the company.

Cash flow table

Financial YearFY 2018FY 2019FY2020FY2021
The net change in cash13.198.85997.50516.65
Changes in working capital-25,665.70-36,807.50-36,513.56-10,977.27
Capital expenditure134.95397.52507.87309.49
Free cash flow-20,700.54-29,459.05-24,919.57-1,190.44
All numbers in ₹ crores

Peers of the Bajaj finance

Bajaj finance peers

Bajaj finance peers

StockPE RatioPB RatioDividend Yield
Bajaj finance ltd106.2512.720.13%
Muthoot Finance ltd15.873.831.33%
Cholamandalam Investment and finance company ltd31.094.930.35%
Shriram Transport Finance company ltd14.581.681.25%

Key takeaways

Muthoot Finance, Cholamandalam Finance, and Shriram Transport Finance are competitors of Bajaj finance in the same business domain. Muthoot gave good dividend yield than any other mentioned in the table above.

Comparing with peers, Bajaj finance has delivered well PE ratio of 106.25 but it has a very low dividend yield because Bajaj finance company didn’t offer a good dividend in the past.

Shareholdings

Share holding of Bajaj finance

Key takeaways

Promoter Holdings Trend

Total promoter holdings
In last 6 months, promoter holding in the company has almost stayed constant

Low pledged promoter holding
Pledged promoter holdings are insignificant

Institutional Holdings Trend

Mutual fund holding
In the last 3 months, the mutual fund holding of the company has almost stayed constant

Foreign institution holding
In the last 3 months, foreign institutional holding of the company has almost stayed constant

Bajaj Finance Investors Table

InvestorsSep 2018Dec 2018Mar 2019Jun 2019Sep 2019Dec 2019Mar 2020Jun 2020Sep 2020Dec 2020Mar 2021Jun 2021
Promoters 55.1555.1555.1758.2658.2656.1556.2056.2056.1256.1256.1256.03
FIIs 20.0820.0720.6721.2820.6522.2221.1621.2421.3123.8924.0624.03
DIIs 8.648.858.508.268.5810.4610.8910.1110.709.079.089.33
Public 15.8615.6815.4711.7812.1410.8711.4612.2211.5510.6410.5710.40
Others0.260.240.190.420.370.300.290.220.320.280.170.21
All the values are given, are in percentage(%)

If you look at the promoter’s investments in BFL is quite constant for the last 2 years. Even it is very well maintained post-Covid-19 conditions.

FIIs(Foreign Institutional Investors) increasing their stakes in BFL for the last 2 years.

Domestic institutional investors (DIIs), the Public, and others have a decent amount of investment in BFL.

Dividend and Split

Bajaj finance dividend and split

Dividends

Dividends are a portion of earnings that a company distributes to all its shareholders every year. Dividend return is one of the most important things to be considered while investing in the long term. It’s the additional return on top of what investors earn through price appreciation

Dividend History of Bajaj Finance

Cash dividendDividend/ShareEx. Date
Final₹10.0008/07/2021
Interim₹10.0003/03/2021
Final₹6.0011/07/2019
Final₹4.0005/07/2018
Final₹3.6006/07/2017

Bajaj finance did not give good dividend returns as compare to its peers. The table above shows when BFL issued dividends to the shareholder in past. Recently BFL gave a dividend of Rs.10 to every shareholder on 08 July 2021.

Read more about dividend and dividend yield with infographics

Bonus/Split Table

Past Corporate ActionsRatioEx. Date
Bonus 1:1 Bonus Issue of Equity Shares  1:1  08/09/2016
Share Split Face Value Change from 10 To 2  1:5  08/09/2016
Rights Issue 3:19 Rights Issue of Equity Shares  3:19  23/01/2013

According to the past, Bajaj finance gave a share split and bonus on the same day 08 September 2016. After this date, Bajaj finance never offered any stock split or bonus to the shareholders of the company.

Read more about stock split and bonus with infographics

Strength and Limitations

Strength

1. Healthy return on equity of 17.68%

2. Operating income has grown well for the company over the past 3 years: 3-year CAGR is 23.01%

3. The company has delivered substantial profit growth of 22.8% over the past 3 years

4. Promoter shareholding is 56.03% right now.

Limitations

1. The company is trading at 12.91 times the book value

2. Provision and contingencies have increased by 46.77%

Expert Forecast

Forecasting uses historical data as inputs to make informed predictive estimates determining the direction of future trends. Price, revenue & earnings forecasts represent where the stock level, business prospects, and profits are potentially expected to be at the end of the forecast period

Bajaj finance stock expert forecast for next year

The stock forecast of Bajaj finance stock for the year of 2022

HIGH

Rs. 9219/Share

MEDIAN

Rs. 6633.46/Share

LOW

Rs. 4463/Share

Future stock price targets of Bajaj Finance stock

The target of Bajaj Finance StockFuture Stock Price(Rs.)
Year 20229200 to 9400
Year 202512000 to 12800
Year 203024500 to 25500
Year 203535000 to 36000
Year 204050000 to 60000

Please Note

These are the stock forecast or stock predictions solely based on historical data and related estimates by industry experts. Please do take advice from certified people and then go for investment.

Here predictions are just data for your information. We here declare that the stock forecast team does not responsible for any price changes or the price does not go expected. At last, it is solely based on how the stock market is running at that certain conditions.

Stock forecast team view

stock forecast team prediction on Bajaj finance

Bajaj finance stock is doing exceptionally well in terms of ratios.

This stock has a CAGR of more than 47% which is a very huge number.

Earnings per share (EPS) is 65.09

The price-to-earnings ratio is 120.

That is why Bajaj finance stock is favorite for investors. I myself invested Rs.21650 during Covid-19 fall but today my investment will be touching 80000 in the upcoming days and it will be growing very fastly.

What’s my investment value, check the image below

Bajaj Finance Investment by Kamlesh Rode
I have invested in Bajaj Finance in the Covid-19 period, now look how much my investment value is!

What if I continue this investment for the upcoming years? You will be pretty amazed by the return showing in the image above

These are future investment values are calculated based on a CAGR(Compound Annual Growth Rate) of 47%.

If this stock keeps CAGR average value for upcoming years, then look at the huge numbers

For the first year, I will be getting more than 1, Lac

For the next 5 years, Investment will be more than 5 Lacs

then for the next 10 years, the investment will touch to 39L.

For the next 15 years, 2 Crores 74 Lacs will be the investment value.

Look at after 25 years number, they are huge. Almost 135 Crores.

You must be laughing but CAGR with compounding giving this amazing result.

Read How Rs.10,000 converted into 1770 Crores Wipro case study?

Conclusion

We highly recommend Bajaj finance stock for future investment. It has given consistently profits to the investors. That’s why promoter keeps their funding for future and it is constant from last few years.

Being only one company in consumer finance, Bajaj finance’s business prospects are very brighter in the future.

Check Bajaj Finance on NSE website

Frequently asked questions

Que: Is Bajaj finance a good investment?

Ans: Looking at the past performance, bajaj finance offered a great return on investment(ROI). It has a good CAGR of more than 47%. This stock has given attractive returns compared to fixed deposits (FDs). The expert also suggested Bajaj finance for future investment. The stock forecast team highly recommends this stock for future investments.

Que: Is Bajaj Finance share overvalued?

Ans: Right now Bajaj finance stock is at a very high price. Yes, it is overvalued but still, it has a bright future ahead. The way it recovered from the Covid-19 situation was a phenomenal journey to get recovered from the loss.

Que: What is the future of Bajaj Finance share?

Ans: Bajaj Finance Ltd quote is equal to 7795 INR at 2021-09-27. Based on our expert forecasts, after one year expected stock price would be more than Rs.9000.
A long-term increase is expected, the “Bajaj Finance Limited” stock price prediction is more than Rs.13000 after the next 5 years. 

Que: What is the difference between Bajaj Finserv and Bajaj Finance?

Ans: Bajaj Finance Limited, a subsidiary of Bajaj Finserv, is an Indian non-banking financial company (NBFC). The company deals in consumer finance, SME (small and medium-sized enterprises) and commercial lending, and wealth management.

Que: What is the Bajaj finance share price target for next year?

Ans: Based on our expert forecasts, after one year expected stock price would be more than Rs.9000.

Que: What is the Bajaj finance share price target for 2025?

Ans: The target price of Bajaj Finance in the year 2025 is 12000 to 12800.

Why Stock forecast by Kamlesh Rode?

5/5 - (1 vote)
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“I love to help people in technology, spirituality and always want people to get better in their lives. Today I’m a stock market enthusiast, a stock trader, web-mobile app developer, blogger, and a spiritual being.”

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