Bajaj Finserv (BAJAJFINSV)

FairStock Score: 51/100 — MIXED

Score breakdown: P/E: 0/3 · ROCE: 0/2 · Growth: 1/2 · Dividend: 0/1

Key Financials

Strengths

• ROE of 25.10% with latest quarter net profit of ₹4,368 Cr demonstrates strong earnings power.
• Consistent growth: sales +15.38%, profit +13.70%, and 5-year revenue CAGR 17.17%.
• Piotroski F-Score 7/9 indicates solid profitability and balance-sheet quality.
• Promoter holding 58.81% aligns controlling interests with minority investors.
• Current ratio 2.73 provides adequate short-term liquidity.

Concerns

• Valuation offers no margin of safety: P/E 32.52, P/B 3.75, and Graham Number ₹807.16 far below price ₹1791.95.
• High leverage: debt/equity 5.13 and Altman Z-score 1.58 highlight financial fragility risk.
• Free cash flow deeply negative at ₹-70,100 Cr; holding-company cash generation is questionable.
• Shareholder return low: dividend yield 0.05%, while PEG 4.85 and EV/EBITDA 719.43 imply expensive growth.

AI Analysis

Bajaj Finserv is a profitable compounder, but I must separate the quality of the business from the price I pay. The company earns a return on equity of 25.10%, with latest-quarter sales of ₹39,708 Cr and net profit of ₹4,368 Cr. Sales grew 15.38%, profit grew 13.70%, and five-year revenue CAGR is 17.17%. Those are admirable numbers for a holding company. The Piotroski score of 7/9 confirms a healthy operating position, and promoter holding of 58.81% keeps management aligned with minority shareholders. Yet Graham's discipline is missing here. Book value is ₹477.90, price is ₹1791.95, so I am paying 3.75 times book. The Graham Number, at ₹807.16, is less than half the price; margin of safety is minus 146.96%. P/E of 32.52 and PEG of 4.85 suggest the market has already priced in years of good news. Debt/equity of 5.13 is high, and free cash flow is negative at ₹-70,100 Cr. Altman Z-score of 1.58 and EV/EBITDA of 719.43 do not make me comfortable, even after allowing for the peculiarities of a financial holding company. Dividend yield of 0.05% means I am not being paid to wait. I value wonderful businesses, but a wonderful business can be a poor investment at too high a price. The FairStock Score of 46/100 says mixed, and I agree. This appears to be a quality stalwart with strong economics, but at ₹1791.95 the margin of safety is not there. If the business continues to compound and the price moves closer to intrinsic value, it would become a more interesting candidate. For now, patience is better than enthusiasm.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer