Check Before You Invest : Bajaj Finserv Ltd

Snapshot

Q.1 Which industry/sub-sector does Bajaj Finserv Ltd belong to?

Bajaj Finserv Ltd belongs to the BFSI sector, operating specifically within the Finance - Investment segment.

Q.2 Is Bajaj Finserv Ltd a good quality company?

Bajaj Finserv Ltd is a good quality company, based on a consistently good 10-year financial track record.

Q.3 Is Bajaj Finserv Ltd undervalued or overvalued?

Bajaj Finserv Ltd appears Undervalued, as its key valuation ratios are below with their past averages.

Q.4 Is Bajaj Finserv Ltd a good buy now?

Bajaj Finserv Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Performance Analysis

Q.1 Total Income growth of Bajaj Finserv Ltd?

Bajaj Finserv Ltd Operating Income growth is 21.23% for FY-2025, which is above its 5-year CAGR of 19.54%, indicating faster growth.

Q.2 Return on Assets of Bajaj Finserv Ltd?

Bajaj Finserv Ltd Return on Asset is 3%, which is in line with its 5-year historical median of 3%, indicating stable earnings on assets.

	Current Level	5-year Historic Median
NPM%	13.12	13.12
PPOP%	20.71	20.71
RoA%	3	3

Q.3 Return on Equity (ROE) of Bajaj Finserv Ltd?

Bajaj Finserv Ltd Return on Equity is 26.8% for FY-2025, which is in line with its 5-year historical median of 26.8%, indicating the business is making similar use of its shareholders capital.

Q.4 Pre-provisioning operating profit margin of Bajaj Finserv Ltd?

Bajaj Finserv Ltd Pre-provisioning operating profit margin, which is the bank’s core operating profit before provisioning for bad loans, is 20.71% for FY-2025, which is in line with its 5-year median(20.71%), indicating stable margins.

Q.5 Net Profit Margin of Bajaj Finserv Ltd?

Bajaj Finserv Ltd Net Profit Margin, which is the difference between the rate of interest earned on assets and the rate of interest paid on liabilities, is 13.12% for FY-2025, which is in line with its 5-year median( 13.12%), indicating stable margins.

Q.6 Total Asset growth of Bajaj Finserv Ltd?

Bajaj Finserv Ltd Total Asset growth is 21.26% for FY-2025, which is above its 5-year CAGR of 21.05%, indicating faster growth.

Ownership & governance

Q.1 Promoter shareholding and pledge status of Bajaj Finserv Ltd?

Promoters hold 58.71% of the Bajaj Finserv Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

Q.1 AUM Growth of Bajaj Finserv Ltd vs Industry Peers?

Bajaj Finserv Ltd AUM CAGR is 21.05%, compared to the 5-year industry median CAGR of 21.05%, indicating stable growth and maintaining its market share.

Q.2 Profit metrics (NPM, PPOP, RoA) of Bajaj Finserv Ltd vs industry peers

Bajaj Finserv Ltd profit metrics are in line with the industry median level of 12.28%, indicating similar profitability compared to peers.

Profit Metrics

	Current Level	5-year Industry Median
NPM%	13.12	13.12
PPOP%	20.71	20.71
RoA%	3	3

Q.3 Operating efficiency of Bajaj Finserv Ltd vs industry peers?

Bajaj Finserv Ltd ROCE (12.5) is in line with the industry median of (12.5); while the current ROE (26.8) are in line with than the 5-year average Industry ROE (26.8). This shows that the business is positioned in the middle quartile of the industry.

Operating Efficiency

	Current Level	5-year Industry Median
NPM%	13.12	13.12
PPOP%	20.71	20.71
RoA%	3	3
ROCE%	12.5	12.5
ROE%	26.8	26.8

Valuation & price assessment

Q.1 Stock return of Bajaj Finserv Ltd over the last decade?

Over the last 9 years, the stock has delivered a CAGR of 24.6% based on the current price.

Q.2 What return has the stock given over the last decade?

	9Y	5Y	3Y	1Y
Share Price CAGR	24.6%	9.6%	9%	-10.7%

Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?

Valuation Ratios	Current	5-year Historic Median	5-year Industry Median
Price to Earnings	28.53	36.01	33.72
Price to Book	3.59	4.50	0.94
Price to Sales	3.28	4.27	12.44
EV to EBITDA	7.62	12.16	9.97

Q.4 Valuation ratios of Bajaj Finserv Ltdvs historical and industry averages?

The current Price to book ratio (P/B) 3.59% is lower than its historical median of 4.50%, indicating that at the current price the stock is undervalued. However, you need a deeper analysis to make a better judgement.

Strategic outlook

Q.1 Does its ROIC exceed its WACC?

Bajaj Finserv Ltd return on invested capital (ROIC) is 7.95% for FY-2025, is lower than its estimated weighted average cost of capital (WACC) of 11.25%, indicating value erosion.

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