Bajaj Finance shares jump over 7% as RBI lifts curbs in less than 6 months

Shares of NBFC Bajaj Finance rallied 7.5% to the day's high at Rs 7,400 on BSE after the RBI lifted restrictions on the company's two key customer acquisition products eCOM and Insta EMI card with immediate effect.

"Investors can now be rest assured that Bajaj Finance is not in the RBI's bad books. The Street's focus will now go back to fundamentals - loan growth, margins and asset quality," CLSA said.

The removal of restrictions by RBI, which was placed in mid-November last year, comes as a positive surprise as it will not only lead to higher customer acquisition and improved fee income but also endorses the management's ability to course-correct quickly when needed.

CLSA analysts estimate that the lost revenue from the ban could be around Rs 2 billion per quarter, which is 4% of PBT.

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While leaving the target price unchanged at Rs 9,620, Jefferies said the removal of ban improves growth visibility and it sees a 24% profit CAGR over FY24-27.

"The early resolution of the restriction increases confidence on the FY25 outlook and raises hopes of approval by the RBI for renewal of BAF’s co-branded credit card with RBL Bank in Dec-24. We keep our FY25-27 estimates unchanged and reiterate our buy rating on the stock, with an unchanged Mar-25 target price of Rs 9,000/share, implying FY26E consolidated P/BV of 5.1x," Emkay Global said.

The impact of the development was also seen in the shares of holding company Bajaj Finserv which were trading 3.5% higher at Rs 1,673 on BSE.

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