Bajaj Finserv Ltd. (NSE:BAJAJFINSV) defied analyst predictions to release its first-quarter results, which were ahead of market expectations. Results were good overall, with revenues beating analyst predictions by 5.3% to hit ₹420b. Statutory earnings per share (EPS) came in at ₹19.49, some 9.6% above whatthe analysts had expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, the current consensus from Bajaj Finserv's nine analysts is for revenues of ₹1.69t in 2027. This would reflect a reasonable 7.8% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to jump 21% to ₹76.63. In the lead-up to this report, the analysts had been modelling revenues of ₹1.67t and earnings per share (EPS) of ₹74.23 in 2027. So the consensus seems to have become somewhat more optimistic on Bajaj Finserv's earnings potential following these results.
See our latest analysis for Bajaj Finserv
The consensus price target rose 9.3% to ₹2,364, suggesting that higher earnings estimates flow through to the stock's valuation as well. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Bajaj Finserv, with the most bullish analyst valuing it at ₹2,640 and the most bearish at ₹1,710 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Bajaj Finserv's past performance and to peers in the same industry. We would highlight that Bajaj Finserv's revenue growth is expected to slow, with the forecast 11% annualised growth rate until the end of 2027 being well below the historical 20% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 14% per year. Factoring in the forecast slowdown in growth, it seems obvious that Bajaj Finserv is also expected to grow slower than other industry participants.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Bajaj Finserv's earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Bajaj Finserv's revenue is expected to perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Bajaj Finserv going out to 2029, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Bajaj Finserv that you should be aware of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.