Shares of Bajaj Finance opened with modest gains on October 6 before slipping into the red, even as the company reported a strong 31% increase in AUM (assets under management) for the September quarter. AUM grew to around Rs 2.18 lakh crore compared to Rs 1.66 lakh crore as of September 30, 2021.

The stock was quoted at Rs 7,376 on the NSE at 9:30 am, down 1.5%. It is the biggest index loser today. The stock has risen nearly 50% from a low of Rs 5,200 in June.

In an exchange filing, the company informed customers that franchises now stand at 62.9 million, compared with 52.8 million a year ago. “Customer franchises increased by 2.6 million in the second quarter of fiscal 2023. New loans registered in the quarter were 6.8 million compared to 6.3 million in the second quarter of fiscal 2022,” it added.

On a sequential basis, new loan bookings declined from 7.4 million in the first quarter of fiscal 2023. Shares of global brokerage Macquarie underperformed with a target price of Rs 5,000. “AUM growth beat expectations, but loan volumes aligned with FY20 overall. Loan volumes remained below estimates of 7 million.”

CLSA has a sell rating of Rs 5,600 per share. “The number of loans issued grew by only 8% year-on-year. This discrepancy between volume and value growth is likely due to higher ticket sizes and mix changes,” it said.

Meanwhile, Bajaj Finance’s liquidity surplus remained strong, with a consolidated net liquidity surplus of Rs 9,300 crore. The capital adequacy ratio (CRAR) stood at 25.1% in September, and the deposit book rose 37% year-on-year to Rs 39,400 crore.

Jefferies and Bank of America Securities remain bullish on the stock, with call options and target prices of Rs 8,000 and Rs 8,345, respectively. They see growing customer franchises and AUM as positive triggers for Bajaj Finance, which positions the company for strong growth recovery.