Bajaj Finserv and Finance on a roll; experts decode short term trajectory

By CNBCTV18.com | Aug 25, 2021, 08:06 PM IST (Published)

Bajaj Finserv and Finance on a roll; experts decode short term trajectory

Shares of the Bajaj twins were on a roll on Monday and Tuesday. One, because the market cap of Bajaj Finance surpassed that of the country's largest lender State Bank of India. Two, Bajaj Finserv has become the latest financial services major to receive the regulatory go-ahead to set up its mutual fund arm. Here's how experts reacted to the news.

- 1 / 5
On Bajaj Finserv | Anand Tandon, Market Expert: Bajaj Finserv has got a license for setting up an asset management company. I would think that is market kind of jumping the gun a bit. Of course, I am sure they will be able to set up a fairly robust company over a period of time. But it is very unlikely that their asset management business will form any significant percentage of their business for a long time to come. The question really is if you think there is value in the other businesses and the Finserv as it is then perhaps you may want to continue holding on to it otherwise it still looks to me like something that is a pop that you may want to use to get out off.
- 2 / 5
On Bajaj Finance | Brijesh Bhatia, Senior Research Analyst at Equitymaster: If you look at the all finance basket, this is into the different league altogether and once it starts moving, generally the other stocks follow and this momentum in Bajaj Finance accelerates. So, Rs 7,400-7,500 that can be watched on to this chart and till then, though, then plus and minus momentum could be there but I foresee around Rs 7,400-7,500 on the Bajaj Finance.
- 3 / 5
On Bajaj Finance | Asutosh Mishra, Head-Research-Institutional Equity, Ashika Stock Broking: If you see the opportunity which is available in the market and the execution scale of Bajaj Finance, it is clearly indicating that they will have a big runway ahead also. If you look from that perspective, and the way fintech is getting lapped up in the market that this point in time I see valuation will continue to remain rich for Bajaj Finance because the growth is going to be very good in the coming years for the company. On the size wise also they are relatively quite smaller than the HDFC Bank and that is why overall growth will be much higher than HDFC Bank. So that will also partially justify the bearish valuation for them. From the long-term perspective, if you look at the stocks they have a good potential.
- 4 / 5
On Bajaj Finserv | Asutosh Mishra, Head-Research-Institutional Equity, Ashika Stock Broking: They are planning to launch an overall marketplace where all the financial products can be transacted through, from that perspective, AMC is a very important part of that whole market shares out there. So, they have a general insurance business, they have a life insurance business out there and AMC was a missing part of that. So, this will fill the gaps from their own product manufacturing point of view. So strategically it is very important, it will not add to the number quickly out there. But from the overall strategy perspective, this is a very important development and given their resolution skill, I clearly see that over the next 4-5 years they will ever ramp up this business and which will start contributing significantly to their earnings from that perspective.
- 5 / 5
On Bajaj Finance | Gurmeet Chadha, Co-Founder & CEO Complete Circle Consultant: This is a consumption stock in NBFC and now comparisons have come with FinTech platforms comparing it with the likes of Paytm and justify the valuations. I think the valuations are looking stressed. The trigger was - initially the first move from Rs 5,000 to Rs 6,000-6,500 was largely on the fintech app and then the AMC license and others. I think a revival of the discretionary spending as the festive season begins on secured lending which is a large part of its book is what it will possibly play on but whenever you buy something at more than 10-12 price to book value, the near-term returns can be challenging, so I am not asking investors to exit Bajaj Finance. I hold it, fortunately, for more than 7-8 years personally but incremental addition at this price – there are better opportunities in financials including maybe some PSU banks or some private banks.