Bajaj Finance Receives 'Buy' Rating and Shows Strong Growth in Latest Quarter

Bajaj Finance, a leading finance and NBFC company, has recently received a 'Buy' rating from MarketsMOJO. This upgrade is based on the company's strong long-term fundamental strength, with an average return on equity (ROE) of 17.16%. Additionally, Bajaj Finance has shown healthy long-term growth, with an annual operating profit growth rate of 27.11%.
The company has also declared positive results for the last 11 consecutive quarters, with a growth in operating profit of 31.64% in the latest quarter. Its net sales for the last 9 months have grown at an impressive rate of 32.21%, while its profit after tax has grown by 23.60%. Bajaj Finance's PBDIT (profit before depreciation, interest, and taxes) for the latest quarter is also at a record high of Rs 10,506.35 crore.

From a technical standpoint, the stock is currently in a mildly bullish range and has shown improvement from a sideways trend on 26th June 2024. Multiple technical indicators, such as MACD, Bollinger Band, and KST, also suggest a bullish trend for the stock.

One of the key factors contributing to the positive outlook for Bajaj Finance is its high institutional holdings at 34.96%. These investors have better resources and capabilities to analyze the fundamentals of companies, making their investment decisions more reliable.

With a market cap of Rs 4,38,249 crore, Bajaj Finance is the second-largest company in the finance sector, behind only life insurance. Its annual sales of Rs 54,965.84 crore also account for 2.65% of the entire industry.

However, there are some risks associated with investing in Bajaj Finance. The company currently has a very expensive valuation, with a price to book value of 5.8. It is also trading at a premium compared to its average historical valuations. Additionally, while the stock has generated a return of 2.29% in the last year, its profits have only risen by 25.6%, resulting in a PEG ratio of 1.3.

Despite these risks, Bajaj Finance has still outperformed the market in the last year, generating a return of 2.29% compared to the BSE 500's return of 38.95%. With its strong fundamentals, positive results, and bullish technical indicators, Bajaj Finance is a promising stock to consider for long-term investment.