The Bajaj Finance share price is up over 38% in the last 1 year, and there is room for more. Well, that’s according to the latest Axis Annual Analysis 2025. The brokerage house, Axis Securities, has recommended Buy with a target price of Rs 1,050/share, implying an upside of 14%
They expect Bajaj Finance to continue its strong and consistent growth trajectory and “deliver a strong earnings growth of 25% CAGR over the medium-term, driven by
-(i) Steady to marginally improving NIMs
-(ii) Operating leverage driving cost ratio improvement,
-(iii) positive outlook on asset quality keeping credit costs under control.
Axis Securities on Bajaj Finance: Competitive strength
Axis Securities lists out some of the key competitive strengths supporting their positive call. These include
-Strong distribution
-Omni-channel strategy augmenting market positioning
-Deep understanding of both rural and urban markets
-Diversified portfolio
-Strong cross-sell franchise
-Best-in-class Asset Quality
Along with these factors, Axis Securities highlighted that “improving the share of NBFCs in overall credit to GDP and a strong growth runway for retail credit along with new product launches in-line with successful execution of the Long Range Strategy will enable Bajaj Finance to strengthen its market position.”
Axis Securities on Bajaj Finance: Consistent earnings
According to Axis Securities’, Bajaj Finance’s consistent earnings trajectory is another factor supporting the Buy call. The total customer base is up 22% YoY along with new loan bookings growing at a healthy 20% YoY rate. Consequently, the AUM growth was robust at 25% YoY in FY25, with growth visible across segments. “Risks emerged in the Rural B2C segment, and the company consciously decided to wind down the captive two- and three-wheeler business, resulting in the company slowing down growth in these segments,” added Axis Securities.
The company maintains a strong pipeline of new product introductions for FY25, and overall earnings growth remained healthy.
Axis Securities on Bajaj Finance: Capital adequacy and asset quality strong
Asset Quality, is another big positive, as per Axis Securities. Bajaj Finance has “maintained pristine asset quality with GNPA at sub-1% levels, despite visible stress in the rural B2C business, captive financing business, and macro headwinds due to customer over-leveraging.”
The company made a conscious effort to curtail lending and tightened credit filters in this segment, they added. Additionally, Bajaj Finance continued to strengthen its distribution franchise and continued to expand its product offering for customers with new launches.
Moreover, they believe the NBFC’s strong capital adequacy will help “fuel medium-term growth without dilution, and the strong risk management framework will keep asset quality under check and support earnings growth.”