Shares of NBFC major Bajaj Finance NSE -7.17 % lost up to 8.2% of its value on Thursday after investors dumped the stock following moderation in loan growth in the December quarter (Q3).
Bajaj Finance's quarterly business update shows some moderation in AUM (assets under management) growth to 27% year-on-year (YoY) and 6% quarter-on-quarter (QoQ) from 31%/7% in Q2. Growth in new loan booking was also slower at 5% YoY.
Global brokerage CLSA, which has maintained a sell rating on the stock, pointed out that the lender's loan growth was slow despite the festive season. It said that despite underperformance, the stock remains "unjustifiably expensive."
Jefferies said in Q3 results, it will watch out if the growth moderation was due to shorter-term securities lending business or retail/ SME loans. Until then, softer growth can weigh on the stock in the near term, it said.
CLSA has a target price of Rs 6,000 while Jefferies has a hold rating on the stock with a target of Rs 8,160. Kotak Institutional Equities also has a sell rating on the stock with a target price of Rs 5,800.
The stock today hit the day's low at Rs 6032.25. In the meantime, shares of holding company Bajaj Finserv NSE -5.10 % also slipped up to about 4% to Rs 1487.55.
Although known as a consistent compounder, shares of Bajaj Finance have lost around 19% of its market cap in the last one-year period.
During the December quarter, the company saw 3.1 million new customers as against 2.6 million in Q2. Its deposit book grew 41% YoY to Rs 43,000 crore as of 31 December 2022.
Noting that the new customer acquisition run-rate was healthy in Q3, Motilal Oswal has maintained a buy rating on the stock.