Investors in Bajaj Finance stock lose more than Rs 33,000 crore in just two days. Is there worse to come?

Latest Analysis
09 Jan 2023

Bajaj Finance: Off to a bad start?

Bajaj Finance saw a fairly volatile 2022 as investors had their sights on 2023 for a better year. However, the stock has declined 8.9% in the first week of 2023!

2022 started off at a good point as the stock had grown 12.6% in the first few weeks. The happiness was short lived as the stock began declining near the end of January 2022. It was a bad time for the Indian markets as the indices had declined for 4 consecutive days due to fears of Russian invasion. At the time, Bajaj Finance had reported its Q3FY22 results wherein the company reported an 84.4% surge in profits on account of significantly lower provisioning.

The stock lost 13.5% in 7 days at the time. The stock remained range bound temporarily but broke through its support levels when Russia launched its offensive on Ukraine on 24th February. Bajaj Finance was one of the worst affected stocks as fears triggered unprecedented selloffs in the domestic market. The scrip lost 6% at the day and 13.05% in less than two weeks.

At these lower levels, the stock found buyers as bulls took charge of the stock once again and climbed back to the Rs 7,000 level by the end of April 2022. However, the stock fell once again as the Q4FY22 results were not in line with the expectations of analysts. The company had also reported a significant decline in the Net Interest Margin, triggering another selloff which tanked the stock 7.2% in a single day!!

This downturn took the stock down till Rs 5201.05 per share, a price level the stock hadn’t seen since May 2021. However, buying picked up once again as the discounted price appealed to several investors. Moreover, stronger provisional results instilled confidence as the stock regained the Rs 6,000 level in a month.

Adding on to the momentum was the impressive results posted by the company, which drove it and Bajaj Finserv up 11% in a single day. However, the stock began falling once again when the RBI banned Mahindra and Mahindra Financial Services from using third party loan recovery services. This was seen as a negative for all vehicle financing companies as the stock took another downturn.



Bajaj Finance witnessed a volatile 2022 wherein it declined 5.4%, but there appeared to be some hope for 2023. It was trading above its resistance at Rs 6506.35, but all aspirations for the stock were broken as the stock crashed 9% in the last two days.

What is the future outlook for Bajaj Finance?

The company recently released a business update for the quarter ended in December 2022. The company reported its highest ever quarterly increase in customer franchises: 31 lakhs. As such, the total customer franchises count stood at 6.6 crores, up 19% YoY. Moreover, the company also recorded 78 lakh new loans during the quarter, its highest ever quarterly number. Moreover, total Assets Under Management (AUM) of the company jumped 27% YoY to around Rs 23,000 crores.

However, the stock tanked 9% despite these outstanding numbers because they were below the expected figures. AUM, which had registered a 6% QoQ growth reported lower growth as opposed to last quarter while the Capital Adequacy Ratio was 25.1%, flat and a sign of weaker growth. The lower growth reported by the company triggered the selloff and dragged the share down by 9%.


Technically, the stock is trading below its 5,20,50,100 and 200 day averages. The RSI of the stock is near 22, meaning the stock is nearing an ‘Oversold’ zone as it breached through two support levels (marked in blue) at Rs 6,506.35 and Rs 6,101.80 per share in a span of two days.

Major brokerages feel that the stock is oversold and could see renewed buying interest in the coming weeks. If the stock sees buying pressure in the coming weeks, the stock could climb back up to challenge its (now) resistances, which it recently breached. 

Report by Jobaaj Group.