BAJFINANCE

Bajaj Finance is a major non-banking financial company (NBFC-D) in India, engaged in deposit-taking, consumer lending, SME and commercial lending. It has a diversified lending portfolio: retail consumer finance, two-/three-wheelers, digital products, gold loans, etc. Strong growth track record: Revenue has grown materially over recent years. For example, revenue in 2024 vs 2023 rose substantially. It enjoys a large customer franchise, distribution reach and strong brand in the NBFC space. NBFC business is inherently exposed to credit risk (asset quality, unsecured loans), interest rate risk and regulatory risk (especially with deposit-taking NBFCs). Valuation appears elevated relative to some peers (we’ll detail later). For example, its P/E is ~36-40x in some metrics. Given the heavy growth expectations, any slowdown in credit growth, increase in NPAs or regulatory headwinds could upset the current optimism. It is in a competitive environment (consumer finance, digital lending) and margin pressures may emerge (cost of funds, competition). While the growth is strong, returns (ROE, ROCE) may not yet be extremely high relative to valuations