Bajaj Finance’s long-range strategy (LRS) to funnel growth via various digital and offline products lifted the company’s stock over 5 per cent in the intra-day trade on Monday. It, however, settled 4.67 per cent higher at Rs 6,025 per share as against the S&P BSE Sensex’s 0.29-per cent gain.
“We raise our earnings estimate, but reduce valuation multiples, as competition intensity remains high especially in consumer finance and mortgage segments along with the company’s plan to enter into risky microfinance business. However, re-rating can happen if the company executes a long range strategy framework and increases stickiness of new franchise customers,” said analysts at Prabhudas Lilladher.
The consumer financier’s five-year LRS framework, spread over 2023-27, encompasses various parameters viz. customer franchise, share of total credit, payments gross merchandise value (GMV), app installs, and web visitors among others. The strategy, which was presented to investors in a post-earnings call last Friday, identified 15 megatrends which will be a force multiplier in the framework.