MOFSL and ICICI Securities yesterday attended Bajaj Finserv Ltd Investor Day, wherein the senior management of Bajaj Finance Ltd, led by MD Rajeev Jain unveiled BAF 3.0 and gave a sneak peek into the NBFC's long-range Strategy 2025-29.
Bajaj Finance identified three new megatrends – green finance, multi-cloud and zero trust – and now has 28 megatrends that it will be working on. The NBFC said it would integrate AI to significantly improve customer engagement, grow revenue, reduce opex and credit costs, and enhance productivity. Bajaj Finance said the acquisition of next 10 crore customers will be done through strategic partnerships, organic acquisitions and Bajaj Prime, adding that it will focus on MSME as its next big growth engine. Lastly, Bajaj Finance said it is aiming to build market leadership in personal loans (PL), gold loans, MFI and two-wheeler (2W), and create a viable payments business.
On Wednesday, the stock edged 0.16 per cent lower to Rs 6,924.15. Bajaj Finance shares have fallen 11 per cent from September 2024 high and delivered a negative return of 5 per cent in the past one year.
"While the valuations are attractive at 3.7 times P/BV and 20 times FY26 EPS, we do not anticipate any significant upside catalysts until it successfully navigates the asset quality challenges in its B2C loan book and makes concerted efforts to improve the proportion of secured loans in its loan mix," MOFSL said.
The domestic brokerage maintained 'Neutral' with a target price of Rs 7,500. This target suggests 8.31 per cent potential upside on the counter over the prevailing stock price. ICICI Securities maintained its 'Buy' on the stock with a target price of Rs 8,500, valuing the standalone business at 4.7 times FY26E BVPS and Rs 1,450 towards housing subsidiaries
Bajaj Finance has demonstrated strong growth in the last 17 years, establishing itself as a leader in India’s financial services sector, MOFSL said. With a robust strategy underpinned by innovation and technology, Bajaj Finance is well poised to achieve its FY25 targets, including Rs 4 lakh crore in AUM and continued leadership in financial performance, it said.
In FY25, Bajaj Finance aims to disburse over 4 crore loans and scale up to a 10 crore customer franchise.
"BAF has identified green finance, multi-cloud and zero trust as its three new megatrends. It will start with financing of solar and EV products to retail and MSME customers in 4QFY25 and will target Rs 2,000 crore of green finance in FY26. In the next 12-18 months, it will implement critical security policies and will deliver comprehensive zero-trust initiatives by FY26," MOFSL said.
The domestic brokerage said Bajaj Finance expects that the deployment of Generative AI across 29 workstreams will result in opex savings of Rs 150 crore annually from FY26 onward.