INSUBCONTINENT EXCLUSIVE:
Bajaj Finance overtook India’s largest bank by assets State Bank of India in market value on Tuesday, becoming the fifth most valued in
the country’s BFSI (Banking, Financial Services and Insurance) basket
The market capitalisation of the finance company stood at Rs 2.32 lakh crore as against SBI’s Rs 2.28 lakh crore after the state-owned
bank’s shares fell 5.5 per cent on Thursday
Bajaj Finance, which has remained unscathed in the NBFC crisis, has been a top performer with the stock soaring over 13.41 times, or 1341
per cent, in the past five years
During this period, SBI gained 5.62 per cent.
Analysts said investor appetite for Bajaj Finance remains strong because of better asset
quality and profitability than most lenders
Bajaj Finance shares have returned 36257 per cent in the past 10 years
An investment of Rs 1 lakh in Bajaj Finance stock on October 1, 2009 would have grown to Rs 3.64 crore today.
Analysts, however, warned
valuations of Bajaj Finance could be stretched
Bajaj is trading at almost 9 times FY20 estimated Price to Book as against 4 times of HDFC Bank and less than 1 per cent of SBI
Despite cheap valuations, analysts are cautious about SBI
Last week, Morgan Stanley downgraded its rating on the stock to ‘equalweight’
The brokerage said the upside in the stock appeared limited given uncertainty on asset quality and net interest margins (NIMs) and that the
ongoing credit crunch in India among weaker-rated borrowers could impact SBI.
