How Bajaj Finance and Bajaj Finserv defied market slumps to deliver consistent growth

Domestic stock market sentiment took a negative hit from the September peak through February 2025. Several stocks across the broader indices declined along with the market, while others dropped simply because everything else was falling. However, in the middle of this challenging environment, two companies withstood this pessimism. Yes, you guessed it right. I am talking of the Bajaj twins i.e Bajaj Finserv and Bajaj Finance.

Bajaj Finserv is a financial services company that offers a range of products, including savings products, loans, mortgages, auto financing, insurance life & general, securities brokerage, and investment solutions.

It owns Bajaj Finance which is a lending business, Bajaj Allianz General Insurance, Bajaj Allianz Life Insurance which are joint ventures with Germany’s Allainz SE, a global insurance and asset management company. BFS holds 74% stake in the companies. Bajaj Finserv asset management which is a mutual fund and other investment businesses, and several digital-first platforms. Bajaj Finance is a subsidiary of Bajaj Finserv and is engaged mainly in the business of lending.

Revenue breakdown (FY2024):

• Retail Finance: 48.6%
• Life Insurance: 24.5%
• General Insurance: 24.1%
• Investment & Others: 2.8%

Consistent CAGR growth

Both the Bajaj twins have been known for their consistent and robust revenue and profit growth. Bajaj Finserv has shown a steady 22% CAGR growth in revenue and profits over the last 3 years. Bajaj Finance has performed even better, with 27% revenue CAGR and 48% profit CAGR. Moreover, Bajaj Finance has not seen any quarter of degrowth in revenue or profit since December 2021 considering its quarterly performance. In Q3FY25, Bajaj Finance posted robust YoY revenue and net profit growth of 27% and 18% respectively. Bajaj Finserv too has shown nearly 10% growth in both top and bottom line.

Strategic corporate actions

• Listing of Bajaj Housing Finance: It's a subsidiary of Bajaj Finance and was listed in September 2024. The company holds an impressive growth record with a 34% revenue and 56% net profit growth over the last 3 years.
• Separation of Bajaj Finserv and Allianz: Bajaj Finserv’s separation from Allianz, its insurance pattern, is a significant move. Allianz sold its remaining 26% stake, giving Bajaj Group full control of Bajaj Allianz Life and General Insurance, strengthening its position in the insurance sector. The Bajaj Group management said that it's going to be a win-win for both entities. It is also the single largest deal in the insurance space in India.
• Promotion of the pivotal figure: Rajeev Jain, who played a key role in Bajaj Finance’s success, was promoted from MD to Vice Chairman. This ensures continuity and sustained growth in the company.

Diversified product

The companies' product diversification like consumer and SME finance, loans, and insurance probably helped them remain sustainable, even when markets were falling.

Their asset and wealth management sectors are relatively less affected by short-term market issues offsetting the losses in the other businesses if any, while insurance tends to remain strong during downturns.

RBI’s relaxation on microfinance

Bajaj Finance and Finserv’s exposure to microfinance has helped companies to benefit from RBI’s relaxation norm. RBI has raised the limit of loan amounts to microfinance borrowers from ₹1 lakh to ₹1.25 lakh.

Bajaj Finance

This is the monthly chart of Bajaj Finance.

The stock corrected slightly in October and November but bounced back sharply to give four straight months of gain. In this upside rally, the stock has broken out of its multiple top zone of ₹8000-₹8100, which the stock hadn't broken since October 2021. Bajaj Finance stock is up more than 32% so far this year.

Bajaj Finserv

Bajaj Finserv gave a symmetric triangle pattern breakout on a monthly time frame near ₹1700 in August 2024 followed by a sharp rise in September 2024. The stock corrected for a while but has taken support at the lower trendline of the triangle and has bounced back recently in January 2025 and continues to grow. Bajaj Finserv shares are up over 23% so far in 2025.