The Bajaj Finserv share price has many people wondering what’s up with India’s most diversified Non-bank Financial Company (NBFC). Perhaps, you’ve read about the lender’s decline in shares for the past months and are wondering how it is going to go from there.
Is the non-bank lender’s share still on a downward curve or is it beginning to see an upward swing? If you’re planning on investing, knowing what is happening to the Bajaj Finserv share price can help you arrive at the right financial decision.
After all, share prices are among the most accurate indicators of a corporation’s overall financial health. Below, we have prepared a brief guide on the current state of the Bajaj Finserv share price. It will help you evaluate your risk when it comes to investing.
Bajaj Finserv Shares at the Start of Pandemic – What Happened?
Similar to all other companies, Bajaj Finserv struggled through the COVID-19 pandemic, especially its non-banking financial company, Bajaj Finance.
In fact, in a report published by brokerage firm Bernstein in March, Bajaj Finance has been downgraded from ‘Outperform’ to ‘Underperform.’ Bernstein also cut the NBFC’s target price by 64 percent to Rs 1,740 per share.
According to the brokerage, the decision stems from its prediction that the unsecured consumer finance business models are likely to become challenging amid the global health crisis.
“At the current early stage of Covid-19 outbreak in India, it is uncertain to project how long the physical restrictions from the government would last beyond the 21-days imposed lockdown. At this stage, it would be conservative to assume that first quarter of FY2021 would be a near complete economic freeze and a crawling recovery post that,” Bernstein wrote.
Following the downgrade, Bajaj Finance’s shares reportedly went down to almost 9 percent, the same day the NSE Nifty 50 rose by 0.22 percent and Nifty Bank Index up by 1.81 percent, Bloomberg Quint revealed.
Specifically, Bajaj Finance reported consolidated sales of Rs 13294.25 crore, which demonstrates a -8.69 percent decline compared from last quarter sales of Rs 14558.92 crore.
At the time, a total of 21 analysts tracking Bajaj Finance were reported to have a ‘Buy’ rating on the stock, while seven have ‘Hold’ and three have ‘Sell’ ratings.
“Bajaj Finance is a company that is involved in consumer financing… With the 21-day lockdown, consumption has slowed down considerably, and discretionary buying is out of sight. In my view, the strong growth that the company was clocking over the past few years is not coming back for at least six months now,” said A.K Prabhakar
Prabhakar is head of research at IDBI Capital, and he shared his predictions with the Business Standard at the time. As a result, Bajaj Finserv, serving as the holding company of Bajaj group, faced a 3.6 percent decline on the process, leading to a low Rs 4,493.4 score on the BSE.
Bajaj Finserv Shares Now – An Update
The good news, while Bajaj Finance indeed had its shares slip to nearly 9% at the onset of the pandemic, it is currently demonstrating a fair rise in its share price.
Only recently, as of June 1, shares of Bajaj Finance were reported to have been up by +6.20% at ₹2073.80. This gives the lender a current market capitalization of ₹1,24,778.28 crore. As a result, Bajaj Finserv also demonstrated an upward swing in its stocks by 7 percent.
This make the corporation the top gainer in the broader Mumbai market, with JSW Steel demonstrating 6.8 per cent increase, Tata Steel recording 6.5 per cent rise, and Hindalco having 4 per cent increase.
“At day’s high, Bajaj Finance shares rose as much as 6.23% to ₹2074.30, after opening at ₹1998.00. Bajaj Finance shares had closed at ₹1952.70 in the previous session. In today’s session, the company’s shares traded in the range of ₹1995.30 to ₹2074.30 on BSE,” Livemint reported.
What Does This Mean?
As mentioned earlier, knowing a company’s share price can help you assess a corporation’s overall financial health. To date, with Bajaj Finance and Bajaj Finserv demonstrating a rise in their share prices, many believe ‘better days’ are coming for the broader stock market.
Others, however, believe that the latest record can’t be relied on, as ‘collateral damage’ might still be on its way to the stock market.
The Bottom Line
To have an expert guide, feel free to consult a financial planner today. In any case, the more information you have, the better financial decisions you can make!