Bajaj Finance Shares Edge Higher As CLSA Maintains 'Outperform' Rating On Loan Growth

Bajaj Finance shares were trading in the green after CLSA maintained its 'outperform' rating with a target price of Rs 1,150. The brokerage is positive about the company's medium-term loan growth and sees positive momentum driven by strategic business decisions.

Bajaj Finance is actively integrating artificial intelligence across its business operations, a move that is expected to enhance efficiency of offerings.

The company also reiterated its credit cost guidance, expecting it to remain within the range of 1.85% to 1.95%. This according to the brokerage provides clarity on the company's approach to managing its loan book quality.

With the repo rate cuts, management expects a 10 basis points expansion in the Net Interest Margin over the year from current levels, which would be a significant boost to profitability.

In a move to address potential asset quality issues, Bajaj Finance has started trimming growth in its Small and Medium-sized Enterprise financing segment. Motilal Oswal notes this as a disciplined approach to risk management, ensuring the company's long-term stability.

Bajaj Finance's remains the brokerage's top pick in the financial sector, with State Bank of India and ICICI Bank.

Bajaj Finance stock rose as much as 0.80% during the day to Rs 896.4 apiece on the NSE. It was trading 0.65% higher at Rs 895.1 apiece, compared to an 0.07% advance in the benchmark Nifty 50 as of 9:26 a.m.

It has risen 20.11% in the last 12 months and 30.95% on a year-to-date basis. The total traded volume so far in the day stood at xx times its 30-day average. The relative strength index was at 39.5.

Twenty one out of the 39 analysts tracking the company have a 'buy' rating on the stock, 13 recommend a 'hold' and five suggest a 'sell', according to Bloomberg data. The 12-month analysts' consensus target price on the stock is Rs 982.7, implying a upside of 9.9%.