In a notable development, the shares of Bajaj Finance Ltd and Bajaj Finserv witnessed a remarkable surge of up to 8% in today's trading session. Let's delve into the reasons behind this upward momentum and explore the factors that have contributed to their impressive performance.
Bajaj Finance, a prominent non-banking financial company (NBFC), experienced a surge of 7.93%, reaching a 52-week high of Rs 7,916.70 during early trade on Tuesday. This surge follows a strong rally over the past five sessions, where the stock has gained more than 12%. This year, the stock has shown impressive growth of about 20%.
One significant factor driving this surge is Bajaj Finance's robust quarterly performance. During the period until June 30, the company saw a significant rise in amount of money it manages, known as AUM. The AUM increased by 32%, reaching an impressive value of Rs 2,70,050 crore. This shows a substantial growth compared to the previous year's value of Rs 2,04,018 crore. Bajaj Finance experienced its biggest-ever quarterly increase in assets under management (AUM), with a remarkable growth of approximately Rs 22,700 crore.
Additionally, Bajaj Finance's deposits book witnessed a notable rise, standing at approximately Rs 49,900 crore at the end of June, reflecting a 46% increase compared to the year-ago period. The company's customer franchise also witnessed significant growth, reaching 72.98 million as of June 30, compared to 60.30 million in the corresponding period of 2022. During the first quarter of the financial year 2024, Bajaj Finance experienced its biggest growth in customer base ever. They managed to attract and serve an impressive 3.84 million new customers during this period.
The impressive quarterly numbers and the healthy acquisition of new customers have garnered attention from market experts. Ravi Singh, Vice-President and Head of Research at Share India, expressed optimism about Bajaj Finance's future prospects, highlighting the strong loan growth and new customer acquisition. Singh believes that the stock's uptrend may continue, with the potential to reach levels around Rs 8,000 in the near term.
However, it's worth mentioning that some experts are warning that the stock is currently considered overbought based on its daily performance. AR Ramachandran from Tips2trades advises investors to consider booking profits at current levels or holding until the daily support level of Rs 7,600 is not broken on a closing basis.
The substantial trading volume on BSE also indicates the heightened investor interest in Bajaj Finance, with approximately 2.18 lakh shares changing hands, surpassing the two-week average volume of 32,000 shares. The counter's 14-day relative strength index (RSI) stands at 78.30, signaling an overbought condition. The stock's P/E ratio is 43.16, and P/B value is 8.62.
In a positive rub-off effect, Bajaj Finserv also experienced a significant jump, surging by 5.99% and reaching a day high of Rs 1,632.95. The stock's 14-day RSI came at 78.30, and it has a P/E ratio of 43.16 and a P/B value of 8.62. Similar to Bajaj Finance, Bajaj Finserv also went ex-dividend on June 30.
Meanwhile, the Indian equity market continued its upward trajectory, reaching fresh all-time high levels. The gains were led by the financials, technology, banks, and consumer durables sectors.
The surge in Bajaj Finance and Bajaj Finserv shares showcases the positive market sentiment surrounding these companies, driven by strong quarterly numbers, robust loan growth, and an expanding customer base. As investors continue to monitor the market and assess the technical indicators, it will be intriguing to observe how these companies perform in the coming days and their influence on the overall market trends. Stay informed to make well-informed investment decisions in this dynamic and exciting market environment.