Brokerage Boost Targets Over ₹10,000 as Bajaj Finance Reaches A Record High

After Rajeev Jain was promoted to Vice Chairman and Anup Kumar Saha was named MD, Bajaj Finance’s stock increased by 4% to a record high of ₹9,070. Citing stability in leadership and anticipated improvements in financial performance, brokers increased their price estimates.

Bajaj Finance Garners Multiple Price Target Upgrades:

On Friday, March 21, Bajaj Finance Ltd.’s shares jumped more than 4% during intraday trade, reaching a new all-time high of ₹9,070. Following the announcement of Anup Kumar Saha as the company’s new managing director (MD), who succeeded Rajeev Jain, there was a significant rise.

Saha will become MD until March 31, 2028, while Jain will assume the position of Vice Chairman for three years beginning April 1. Several brokerages raised their price estimates on the company due to the leadership continuity and clear strategic direction, which improved market confidence.

According to a statement released by Bajaj Finance, Anup Kumar Saha, now the Deputy Managing Director, will take over as MD on April 1, 2024. He will be in office until March 31, 2028. Meanwhile, the company’s longtime leader, Rajeev Jain, will be reappointed as Vice Chairman for three years.

Saha has 25 years of expertise in the financial services industry and joined Bajaj Finance in 2017. He is an experienced industry expert with 14 years of experience with ICICI Bank and 11 years with non-bank financial firms.

Citing leadership continuity, strategy clarity, and prospects of excellent financial performance, top international brokerages have increased their price estimates on Bajaj Finance. The changes were made in response to market worries about possible management transition risks being allayed after longtime Managing Director and CEO Rajeev Jain confirmed his continuous affiliation with the company.

BofA Securities: BofA Securities kept its “purchase” rating but increased its price objective on Bajaj Finance to ₹10,500. Recent developments removed a significant overhang, the brokerage noted, referring to the leadership change as a “well-executed plan.” It anticipates rising loan costs and a rebound in net interest margins (NIMs), which will enhance overall profitability and help Bajaj Finance’s earnings.

Citi: Citi maintained its “purchase” rating while increasing its price objective on Bajaj Finance to ₹10,200. The brokerage applauded the company’s leadership continuity and strategy clarity, stating that these qualities boost execution skills and limit risks associated with management transitions.

With the highest price target among brokerages, CLSA confirmed Bajaj Finance as its “top pick” and forecasted a 26% compound annual growth rate (CAGR) in net profits over the following two years. To maintain profit growth, the brokerages say that credit costs are close to their high and should level out in the fiscal year 2026.

Morgan Stanley: Citing Jain’s ongoing leadership as a significant confidence boost, Morgan Stanley also updated its price objective for Bajaj Finance from ₹9,300 to ₹10,500. According to the brokerage, the presence of Jain lowers long-term uncertainty, which ought to boost investor confidence. It was said that one of the “strongest and clearest investment theses” among large-cap private financials is now held by Bajaj Finance. Morgan Stanley believes the stock’s recent re-rating will hold up and generate robust returns over the upcoming year.

In intraday trading on Friday, Bajaj Finance’s shares surged 4.4% to hit a record high of ₹9,070. From its 52-week low of ₹6,376.55 in June 2024, the stock has risen more than 42%. Additionally, the scrip has increased by 4.5% in March, continuing its winning run for the fourth straight month. It increased by 8.5% in February, 15.5% in January, and about 4% in December.