Bajaj Finance on Friday surpassed Axis Bank in market value for the first time. The market capitalisation of the finance company stood at of Rs 134,952 crore on Friday after the stock gained 3.5 per cent to close at Rs 2,335. Axis Banks market capitalisation ended at Rs 134,725 crore.
This makes Bajaj Finance the sixth most valuable company in the banking, financial services and insurance (BFSI) sector in India. Bajaj Finance, which gained 33 per cent so far this year as compared to a 4 per cent rise in the Sensex, is currently trading at a price-to-book ratio of 8, making it one of the expensive stocks in the BFSI space.
Though valuations of Bajaj Finance are not cheap, analysts remain positive about its prospects.
“Strong loan growth, operating leverage gains and stable credit costs should drive 38 per cent EPS CAGR and 20 per cent+ ROE over FY18-20E for Bajaj Finance. This should support its premium valuations,” said Bhaskar Basu, research analyst, Jefferies, in a report.
The stock has given an annualised return of 57 per cent in the past 10 years compared to 24 per cent by Indias most valuable bank HDFC Bank.
HDFC Bank with a Rs 5.35-lakh crore market capitalisation, is the most valuable bank in the country. Its parent, HDFC with Rs 3.10-lakh crore market capitalisation is the second biggest company in the BFSI space.
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