Bajaj Finance , one of India's leading non-banking financial companies (NBFCs), has unveiled its ambitious growth strategy, targeting a loan book of ₹10 lakh crore and a profit of ₹43,000 crore by fiscal year 2029 (FY29). The company also announced plans for internal succession, signaling a strategic approach to its long-term leadership.

Aggressive Growth Targets

Rajeev Jain, Managing Director of Bajaj Finance, outlined the company's aggressive growth plans:

• Loan Book Target: ₹10 lakh crore by FY29
• Profit Target: ₹43,000 crore by FY29
• Customer Base: Aim to serve 200 million customers by FY29
• Annual Customer Acquisition: 15-17 million new customers annually
• Return on Assets: Maintain at 4.3-4.7%

The NBFC, which reported annual earnings of ₹16,779 crore, expects to cross the ₹5 lakh crore mark in size this year. In FY25 alone, Bajaj Finance added an impressive ₹86,000 crore in assets under management.

Succession Planning

In a significant move, Jain announced plans to present a succession plan to the board within the next six months. Key points of the succession strategy include:

• The new CEO will be an internal candidate
• Jain's current term runs until March 2028
• The successor is expected to be announced by January 2028

This proactive approach to leadership transition demonstrates Bajaj Finance's commitment to long-term stability and growth.

Market Focus and Competitive Landscape

Despite evaluating international expansion opportunities in Indonesia, Philippines, and Vietnam, Bajaj Finance has decided to focus on the Indian market. Jain noted that the competitive landscape in retail banking has intensified dramatically post-COVID, with the market becoming more fragmented.

Financial Performance

Bajaj Finance's ambitious targets and strategic planning reflect its confidence in the Indian financial market and its own capabilities. As the company moves forward with its growth plans and leadership transition, it will be interesting to see how it navigates the increasingly competitive landscape of retail banking in India.

Foreign Institutional Investors (FIIs) continue to maintain a cautious stance on Indian equities, despite recent government initiatives such as GST rate rationalization, according to Pramod Amthe of InCred Capital. While these reforms, including GST cuts and income tax reductions, are significant, overseas investors are holding back, waiting for concrete evidence of earnings growth before increasing their allocations.

Persistent FII Selling

FIIs have been consistent sellers, a trend attributed to India's weak earnings cycle, which has persisted for nearly a year. Analysts have further dampened expectations by cutting profit forecasts by 1-3% in the recent quarter.

India's Market Performance Lags Globally

The cautious approach of FIIs is reflected in India's equity market performance, which has been underwhelming on a global scale. Among 50 countries tracked, India's market ranks in the lower quartile, highlighting the impact of reduced foreign investment.

Sector Opportunities Amid Reforms

Despite the overall caution, Amthe identifies potential opportunities in sectors benefiting from GST cuts:

• Autos
• Financials
• Consumer discretionary

Recommended stocks in these sectors include:

• Maruti Suzuki
• Bajaj Auto
• Bajaj Finance
• Shriram Transport Finance
• TCPL Packaging

Market Outlook and Strategy

InCred Capital's outlook for the Indian market remains conservative:

• Benchmark indices are expected to post only 3-4% upside by March 2025
• A tilt towards largecap stocks is recommended

Sector Shifts

InCred has adjusted its sector preferences:

• More constructive stance on IT and FMCG sectors
• Added Wipro and LTTS to their portfolio
• Upgraded HUL

Earnings Outlook

On a positive note, InCred expects the current quarter to mark the bottoming out of earnings cuts, potentially signaling a turning point for corporate profitability.

As the market navigates through these challenges, investors and analysts alike will be closely monitoring corporate earnings for signs of the anticipated growth that could reignite FII interest in Indian equities.