Bajaj Finance shares mounted 8% as it reported upbeat numbers for the quarter ended June 2023. The customer franchise as of June 30 resulted at 72.98 MM versus 60.30 MM as of June 30, 2022.

The company also chronicled the highest-ever quarterly increase in its customer franchise of 3.84 MM in Q1FY24. The new loans reserved during Q1FY24 grew by 34% to 9.94 million compared to 7.42 million in Q1FY23.
Deposits book stood at about Rs 49,900 crore as of June 2023, a growth of 46% over Rs 34,102 crore as of June 2022.

Its assets under management (AUM) increased by 32% to Rs 2,70,050 crore in Q1FY24 versus Rs 204,018 crore in the same period last year. The combined net liquidity surplus stood at Rs 12,700 crore as of June 2023. In contrast, its AUM mix continued stable in Q1FY24.

A meeting of the company’s board of directors will be held on July 26 to deliberate and approve the unaudited standalone and consolidated financial results for Q1FY24.

Morgan Stanley preserved its overweight rating on the sock and elevated the target price to Rs 9,250 per share. The brokerage said asset growth of 9.2% QoQ and 32% YoY should dispel the loan growth debate. Volume growth and strong customer purchase trend are also supportive of share prices.

Morgan Stanley emphasised that Bajaj Finance has a strong credit track record while return on assets (ROA) is at an antique high. Thus, it sees the stock to rerate to 30x F25 P/E.