Why do Bajaj Twin shares skyrocket 10-11% in a single day?

on BSE, Bajaj Finance settlement of shares above 7,076.30 682.55 or 10.68%. Shares close at day’s high 7,107 each – with an overall gain of 11.16% on the exchange.

On the back of strong performance, Bajaj Finance by market cap has overtaken LIC, the largest insurer, to become the eighth largest company in terms of market share. The market cap of Bajaj Finance is around 4,28,419.89 crore, while LIC’s valuation is close 4,26,842.47 crores.

meanwhile, Bajaj Finserv shares closed above 14,652.30 1,349.15 or 10.14%. Overall, the shares have jumped with an intraday high of 11.09% 14,777.85 each. The market valuation of the company is approx. 2,33,383.19 crore.

Bajaj twins were the top gainers on both BSE and NSE today.

During Q1FY23, Bajaj Finance net profit up 159% 2,596 crore as compared to 1,002 crore in the same quarter last year. Net Interest Income (NII) up 48% 6,638 crore in Q1 from 4,489 crore in the first quarter of last year. During Q1FY23, new loans booked grew 60% to 7.42 million as against 4.63 million in Q1FY22. The company has achieved a milestone by creating an Asset Under Management (AUM) record Up 28% from Rs 204,018 crore 159,057 crore.

In Q1FY23, Bajaj Finserv posted a consolidated net profit of 57% higher than Rs 1,309 crore 833 crore in the same period last year. Meanwhile, the total income was Up 14% from Rs 15,888 crore in Q1FY23 13,949 crore in Q1 a year ago. Also, interest income increased by 29.32% 8,971.49 crore in Q1FY23 as against 6,937.32 crore in Q1FY22.

Investors also bought shares of Bajaj Finserv after the company announced a 5:1 share split, where five equity shares of face value of Re 1 each would be offered on an existing share whose face value is 5 each.

Also Bajaj Finserv has announced a 1:1 bonus issue.

Analysts are bullish on Bajaj Finance shares.

Shares of Bajaj Finance:

Analysts at JM Financial said, “BAF’s 1QFY23 results demonstrate the all-round strength provided by its adroit liability management (NII/AUM +41bps QoQ up 13.2%), continued customer acquisition momentum and pre-Covid Let us normalize credit costs across levels. This translated into a strong ROA of 5%+ (4%+ after print in 4QFY22) despite all cost/income ratios at a high of 36%. We believe That it sets the stage for strong earnings momentum (thereby raising the medium-term NIM profile as BAF grows its mortgage business) even as the impact of its omnibus strategy is still not visible. Customer franchise expanded to 60.3 million (5% QoQ) with cross-sell franchises at 34.7m (6% QoQ up) AUM growth was 3% QoQ / 28% annually, led by rural (10% QoQ) / 38% p.a.) There was a sharp recovery in the business.”

“Digital throughput speeds improved (as reflected in digital EMI card acquisitions, wallet additions) and BAF rolled out its QR deployment and merchant POS – as it scales up its payments business strategy,” analysts said. The quality of the OTR was noteworthy, as the GS3 ratio was sequentially reduced to 1.25% (1.6% in 4QFY22), and the GS2 ratio (including 0.2% of OTR) dropped to 1.8% (versus 2% in 4QFY22). Mgmt. exuded The confidence margin will remain around the current level for the next three quarters and the impact of rising COF will be gradual.MGMT also believes that the CIR (36% in FY23) will come down from FY24 as Operating leverage will begin.

“We estimate AUM CAGR of 27% in FY22-24E, delivering a RoA/RoE of 4.8% / 24.2% in FY24E. BAF is one of our top picks in the financial sector. Maintain BUY with unchanged TP 9,000,” analysts said.

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