Why Bajaj Finance shares surged over 4.5% today?
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Pune-headquartered NBFC major, Bajaj Finance witnessed a stellar buying sentiment on Wednesday’s trading session. Bajaj Finance and its parent Bajaj Finserv were the biggest contributors to Sensex today. The investors’ optimism in Bajaj shares come after Bajaj Finance announced its provisional data for the first quarter of FY23 ahead of its result. The stock skyrocketed as the company made strong growth in terms of new loans and customer franchises, meanwhile, also continued to maintain a robust liquidity position.
Both Bajaj Finserv and Bajaj Finance were top gainers of Sensex with an upside of more than 4.5% each, followed by other heavyweights like HUL, Maruti Suzuki, Asian Paint, and Titan.
Bajaj Finance’s strong performance in the Q1FY23 sparked a bullish sentiment in its parent Bajaj Finserv as well during the day.
On BSE, Bajaj Finance shares closed at ₹5,917.60 apiece up by ₹255.55 or 4.51%. The shares had touched an intraday high of ₹5,932.95 apiece during the trading hours.
Due to its strong upside on BSE, Bajaj Finance outran ITC in becoming the 11th most valued company. Currently, Bajaj Finance’s market cap is around ₹3,58,268.80 crore compared to ITC’s market valuation of ₹3,56,388.56 crore.
Up till June 5, ITC held the 11th most valued company title on BSE. However, that has changed with Bajaj Finance taking the 11th position as of now.
As of June 30, 2022, Bajaj Finance’s customer franchise surged to 60.3 million as compared to 50.5 million as of 30 June 2021. Also, the company recorded the highest ever quarterly increase in its customer franchise of 2.7 million in the first quarter of FY23.
Further, the company booked new loans of 7.4 million in Q1FY23 against 4.6 million in the same quarter last year.
Bajaj Finance’s core assets under management (AUM) bettered at ₹204,000 crore as of June 2022 compared to ₹156,115 crore as of June 2021. This means in Q1FY23, the core AUM has jumped by 31% or by approximately ₹11,900 crore.
Overall deposits book increased by 22% to ₹34,100 crore in Q1FY23 compared to ₹27,972 crore in Q1FY22. The company’s liquidity position remains strong with a consolidated net liquidity surplus of ₹11,550 crore as of June 30, 2022.
Meanwhile, the company also continued to remain well-capitalized with a capital adequacy ratio (CRAR) of approximately 26.2% as of 30 June 2022.
During the quarter, Bajaj Finance invested ₹2,500 crore in equity shares of Bajaj Housing Finance, a wholly-owned subsidiary of the Company.
On the share performance, Yash Gupta, Equity Research Analyst, Angel One said, “Overall the Q1FY23 quarterly update seems to be very strong for Bajaj Finance and the company is back on its pre-covid growth momentum.”
“We expect bajaj finance to continue this growth momentum for the next couple of quarters. We have a neutral outlook on Bajaj Finance looking at the current valuations and comparing with peers group,” Gupta added.
In the annual report of Bajaj Finance for the financial year FY22 which was released on July 4, chairman Sanjiv Bajaj said that he expects Bajaj Housing Finance to become a truly significant presence in the housing finance market. Also, he expects Bajaj Financial Securities to grow impressively in the years to come.
Both Bajaj Housing and Bajaj Financial Securities are wholly-owned subsidiaries of Bajaj Finance.
The chairman is optimistic about Bajaj Finance’s growth and its ability to delivery superior performance and greater shareholder value.
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