Shares of Bajaj Finance fell sharply in Thursday's trade despite reporting record new loan and customer franchise growth in the third quarter (Q3) of the current financial year 2022-23 (FY23). The stock slumped 8.24 per cent to hit a day low of Rs 6,032.25 over its previous close of Rs 6,573.60.
The shadow lender, in an exchange filing, said it has recorded highest-ever quarterly increase in its customer franchise of 3.1 million in Q3 FY23. Customer franchise, as of 31 December 2022, stood at 66 million as compared to 55.4 million in the same period a year ago, it added.
Bajaj Finance also mentioned that new loans booked during Q3 FY23 were the highest ever at 7.8 million as compared to 7.4 million in Q3 FY22.
Lower than expected assets under management (AUM) growth led to a decline in shares today, an analyst said, suggesting to book profit at current levels.
"Lower than expected AUM growth in its Q3 FY23 update has led to a sharp fall in Bajaj Finance stock price today. On the daily charts, Bajaj Finance is starting to get into oversold territory and short sellers are advised to book profits at current levels. A green candle close above Rs 6,490 should be used to buy for targets of Rs 6,693-6,895 in the coming days," said A R Ramachandran from Tips2trades.
A total of 1.41 lakh shares changed hands today against a two-week average quantity of 21,000. The turnover on the counter stood at Rs 87.05 crore. The non-banking financial company commanded a market capitalisation (m-cap) of Rs 3,71,044.28 crore.
On BSE, there were 64,692 sell orders against buy orders of 22,585.
The stock has an average target price of Rs 8,536.80, as per publicly available data with Trendlyne, which suggests a potential 40.26 per cent upside on the counter.
That said, the scrip was last seen trading lower than 5-day, 20-day, 50-day, 100-day and 200-day moving averages today.
Bajaj Finance's 14-day relative strength index (RSI) came at 27.79. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a price-to-equity (P/E) ratio of 44.07.
In what could be seen as a rub-off effect, Bajaj Finserv also tanked today. Shares of Bajaj Finserv plunged 5.85 per cent to hit a day low of Rs 1,457 compared to its previous close of Rs 1,547.45. Support on the counter could be seen at Rs 1,483.
"Bajaj Finserv has strong support at Rs 1,483 on the daily charts. A close below this level could lead to targets of Rs 1,426-1,339 in the coming days. Strong resistance will be at Rs 1,548," Ramachandran said.
Ravi Singh, Vice-President & Head of Research at Share India, said, "The recent fall in Bajaj Finserv and Bajaj Finance from the high of Rs 1,570 and Rs 6,640 levels, respectively, has seen supportive volume formation on daily charts which indices inherent weakness in the stock. The stocks are trading below 200-DEMA (Double Exponential Moving Average) which will act as an immediate resistance, which is placed at Rs 1,517 and Rs 6,682 levels, respectively, and indicates weakness in the counters and any minor bounce in the stock can be used for shorting opportunity for the week."
He further said, "The parabolic SAR (stop and reverse) is trading above the price action on daily charts which indicates the downtrend will remain intact. The recent development in the stocks suggests that Bajaj Finserv and Bajaj Finance will remain under pressure in the near term and may touch the levels of Rs 1,400 and Rs 5,800 respectively."
On charts, Bajaj Finserv has given a breakdown and it seems to be headed for Rs 1,300, said Ravi Singhal, CEO, GCL Securities. Keep stop loss placed at Rs 1,520, he added.
Singhal said, Bajaj finance has also given a breakdown and it seems to be headed near Rs 6,220. Maintain a stop loss at Rs 6,288 for a downward target of Rs 6,000, the GCL Securities Chief Executive further stated.
Meanwhile, Indian equity benchmarks fell sharply in afternoon trade, dragged by banking, financial and technology stocks.
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