Bajaj Finance – India’s cash machine

Yet another thumping result from Bajaj Finance which has been the darling of Indian stock markets for more than a decade now. 43% growth in profits over the Sep18 results. This comes at a time when the country is crying of slowdown. Expectation over delivered.

2 years back Bajaj Finance had 300 crores of profits per quarter, last year it was 800 crores, now it is 1375 crores. This company is growing money like nobody’s business. Stock has delivered 250% returns in the last 3 years. 8000% in the last 10 years. Very few investors would have made all of this gains because, there was some bumpy ride which would have triggered exit for many of the early entrants. Yet in every season this stock delivers best returns to its investors.

Our experience with this stock was a 300% in 2014 to 15 and currently holding with 35% gains.

Can we invest now in this stock or add it to a stock portfolio?

Probably not at this level. It requires some correction. Management comments on the results was kind of pessimistic, giving warnings of future earnings. The same had come in the last quarter too and the stock has delivered even bigger numbers than last quarter. At the same time the tide cannot continue for ever, whereas there is still more steam left in this stock. Currently Bajaj Finance is available at 50 times its earnings, too high a price though the stock is a gold mine. It will become attractive if price drops to 3000 levels, which mostly does not happen in this stock.

It only comes to such mid values when the whole market goes to big pain. One can keep the stock in his/her radar or watchlist, if price reaches 3000, without second thought add the stock to your portfolio. The next expected target for the stock is 4800 levels.