Rajeev Jain's Continuity In Bajaj Finance Bodes Well For Investor Confidence, Say Analysts

Rajeev Jain's continuity in Bajaj Finance Ltd.'s senior leadership should improve investor confidence and sentiment and end the long-standing uncertainty, according to analysts.

India's most valuable non-bank finance company on Thursday appointed Jain as vice chairman and Anup Kumar Saha as managing director, effective April 1 for a period of three years.

The continuity of management team will add credence to the company's strategic execution of 'BFL 3.0', Citi said. BFL 3.0 refers to the firm's goal of developing an AI-enabled tech architecture, to be the lowest cost operating model in financial services.

The development mitigates concerns around management transition risk and fortifies medium-term growth visibility, the brokerage said.

Morgan Stanley said Rajeev Jain's continuity in Bajaj Finance will make investment thesis for the company "one of the strongest and clearest" among large-cap private financials.

"We see this as becoming one of the better conducted management transitions among Indian financials. The outlook for the stock is as clear as it can get. Management transition concerns have been resolved, credit costs are poised to decline, a favourable interest rate cycle is likely in the offing, and regulatory risks are receding," analysts said in a note.

Jain joined the Bajaj Finserv Group in 2007 as the chief executive officer of Bajaj Finance and became the MD in 2015. His term ends in March. He will take charge as vice chairman in the capacity of an executive director.

Saha was appointed as an executive director for a period of five years from April 2023 up to March 2028. Thereafter, he was redesignated as deputy MD for remainder of his tenure up to March 2028.

He is now being redesignated as MD for remainder of his tenure, that is, from April 2025 up to March 2028.

• Citi: Maintained 'buy' with target price raised from Rs 9,060 to Rs 10,200.

• Morgan Stanley: Remained 'overweight' with target price raised from Rs 9,300 to Rs 10,500.

Of the 38 analysts tracking Bajaj Finance, 28 have a 'buy' rating on the stock, and five each have a 'hold' and 'sell' calls, according to Bloomberg data. The average of 12-month analysts' price target implies a return potential of 1.2%.

Bajaj Finance's share price closed 0.6% lower at Rs 8,680 apiece on the NSE, compared to a 1.24% gain in the benchmark Nifty 50.