Bajaj Finserv Surges On Q1 Beat, Stock Split, Bonus Issue

Shares of Bajaj Finserv surged over 10%, the most in 17 months since Feb 1, 2021, after company reported more-then-expected net income for the quarter-ended June and approved a stock split and a bonus issue.

Q1FY2022-23 (Consolidated, YoY)

• Net income at Rs 1,309.4 crore Vs. Rs 832.8 crore (Bloomberg estimate: Rs 871 crore).

• Revenue at Rs 15,888.3 crore Vs. Rs 13,949.5 crore.

• Interest income at Rs 8,971.5 crore Vs. Rs 6,937.3 crore.

The company approved sub-division of each existing equity share of face value of Rs 5 each into five equity shares of face value of Re 1. It also approved issue of one bonus equity share of face value of Re 1 each for every one equity share of Re 1.

Bajaj Finserv's share price is one of the highest among peers while having one of the smallest capital bases. Explaining the reason behind stock split, the company the high share price could make in difficult for small potential shareholders to enter the stock as it rises.

Trading volume is nearly five times the 30-day average. The relative strength index of the stock is 81, suggesting it may be overbought.

Of the 10 analysts tracking the company, eight suggest 'buy', one recommends 'hold' and one suggests 'sell'. The return potential of the stock is 7.4%.

Nomura upgraded the stock on Thursday from 'reduce' to 'neutral' with the target at Rs 14,250, an implied downside of 2.03%.