Bajaj Finance Stock Soars: Analysts Bullish Amid Valuation Risks
Bajaj Finance HQ & Representative image of NBFC business in India (Image credit X.com)
Bajaj Finance Stock Rides ‘Dance of Elephant’ Sentiment
By S Jha
New Delhi, April 24, 2025: Bajaj Finance Ltd., India’s leading non-banking financial company (NBFC), emerged as the showstopper in the stock market in 2025.
The NBFC behemoth has been on an ascending curve in the stock market. The stock has delivered stellar over 35 per cent return so far this year.
The shareholders have also gained with the company valuation expanding by ₹1.5 lakh crore this year. With market capitalization closing in on ₹6 lakh crore, the Bajaj Finance stock hit a 52-week high of ₹9,315 this week. At the beginning of the year, the stock was trading at about ₹6900. However, experts now strike optimism and caution, while noting the high valuation.
Stellar Performance Driven by Strong Fundamentals
Bajaj Finance’s Q4 FY25 results have fuelled investor enthusiasm. The company reported a 26 per cent year-on-year increase in assets under management (AUM) to ₹4.17 lakh crore. The customer base expanded to 101.82 million, netting 4.7 million new customers in the quarter alone.
The deposit book also grew 19 per cent to ₹71,400 crore, signalling strong investor confidence. LiveMint notes that the company’s diversified lending portfolio, spanning retail, SMEs, and commercial customers, has underpinned its resilient growth amidst credit cost pressures.
CLSA, quoted by Times of India, set a target price of ₹11,000, stating, “Form is temporary, class is permanent”. Elara Capital, equally bullish, raised its target to ₹11,161 per The Economic Times.
The brokerage highlighted the stock’s “multi-year breakout” potential, likening its performance to “the dance of an elephant”.
On X, user @AyushKumarRathi echoed this optimism, noting, “BAJFINANCE breaking out after four years of consolidation. Consistent growth in sales & profit.”
Technical Strength and Market Sentiment
Technical analysts see further upside. The Economic Times reported that despite mild selling pressure after hitting a record high of ₹9,258 in March 2025, the stock remains above key moving averages, signalling bullish strength.
Experts suggest a target of ₹9,300–9,500 in the next 7–8 weeks, provided it holds above ₹8,220. However, Ameya Ranadive of StoxBox, cited by Business Today, cautioned about potential profit-booking around ₹9,200 due to a negative RSI divergence, indicating weakening momentum despite higher price levels.
Laurence Balanco of CLSA, in a discussion with CNBC TV18, observed, “I expect a major multi-year trading range breakout in Bajaj Finance,” reinforcing the stock’s long-term potential.
This sentiment aligns with Morgan Stanley’s inclusion of Bajaj Finance in its Asia Pacific Ex-Japan and Global Emerging Markets focus list, citing a strong investment outlook.
Valuation Concerns and Regulatory Scrutiny
Despite the bullish outlook, concerns about stretched valuations are emerging. Vikas Gupta of OmniScience Capital, quoted by The Economic Times, noted that Bajaj Finance’s P/E ratio has climbed from 26–27 in November to 35–36, approaching fair value.
“Future returns will rely more on earnings than P/E expansion,” Gupta warned. BNP Paribas flagged provisioning risks in Q4 FY25, particularly due to peak borrowing costs expected in Q2 FY25, which could impact sentiment.
On X, analyst @sandipsabharwal expressed skepticism earlier this year, stating, “Bajaj Finance results show first signs of stress. Their growth rates are too high under current tight liquidity scenario.”
He later added, “Given its valuations of 4.5X next year Price to Book value and regulatory glare on aggressively growing NBFCs, I could not convince myself to buy.”
Disclaimer: This article makes no recommendation for buy or sell of shares of any company.
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