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Elaborative SWOT Analysis of Bajaj Finserv – One Of The Flourishing NBFC in India

by | Case Studies | 0 comments

The last time we saw the updated business model of Bajaj Finance. This time we will explain the SWOT Analysis of Bajaj Finserv.

Bajaj Finserv is the one-stop solution for all your financial problems. Bajaj Finserv is one of the flourishing non-banking financial companies in India supporting millions of customers in financial terms by providing solutions for asset acquisition through financial, from general insurance to family protection all your financial needs in one place. 

The marketing strategy of Bajaj Finserv includes traditional as well as digital marketing. In today’s time, digital marketing is very important for reaching out to customers as everything is shifting towards digital. If you want to learn digital marketing and its scope, do check out Free Digital Marketing Masterclass by Karan Shah, the founder and CEO of IIDE.

Before we dive into the SWOT Analysis of Bajaj Finserv, let’s take a look at the company, its history, finances, products, and opponents.

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About Bajaj Finserv

SWOT Analysis of Bajaj Finserv - Bajaj Finserv Quarters
(Source: The Economic Times)

Founded in the year 2014, Bajaj Finserv Limited is an Indian financial service company based in Pune, India. Bajaj Finserv is part of Bajaj Holdings & Investments Limited, is an Indian financial services company, focused on offering financial products ranging from lending, asset management, wealth management, and insurance, etc.

The company employs 20,154 employees plus at more than 1,409 locations and is engaged in consumer finance businesses, life insurance, and general insurance. 

Aside from financial services, Bajaj Finserv is also dynamic in wind energy generation with a capacity of 65.2 MW installed. In the Economic Times 500 rankings, Bajaj Finserv came top at 119 in 2014. 

Bajaj Finance Limited (BFL), took part in the financial business(services) and is a company listed on The Stock Exchange, Mumbai (BSE), and the National Stock Exchange (NSE).

 

Quick Stats on Bajaj Finserv
Founder Jamnalal Bajaj of Bajaj Group
Year Founded 2007
Origin Pune, India
No. of Employees 26,969
Company Type Public
Market Cap Rs 2,76,946 Crore (2021)
Annual Revenue Rs 54,351.47 Crore (2020)
Net Income/ Profit Rs 3,369.13 Crore (2020)

 

SWOT Analysis of Bajaj Finserv - Bajaj Finserv Range of Services
(Bajaj Finserv Range of Services, Source: Facebook)


Services By Bajaj Finserv

Bajaj Finserv has been in the financial service industry for more than a decade and deals in:

  • Insurance
  • Credit cards
  • Mutual Funds
  • Mortgage Loans
  • Investment management


Competitors of Bajaj Finserv

  • Aditya Birla Capital Ltd
  • Edelweiss Financial Services Ltd
  • L&T Financial Holdings Ltd
  • Muthoot Capital Services Ltd
  • Reliance Capital Ltd

After understanding the core of the corporate, let us now proceed to the SWOT analysis of Bajaj Finserv. 


SWOT Analysis of Bajaj Finserv

Bajaj Finserv is a part of Bajaj Holdings & Investments Limited, is an Indian financial services company focused on lending, asset management, wealth management, and insurance in the Indian financial ecosystem. We shall do a thorough SWOT Analysis of Bajaj Finserv to gain insights into the company’s strengths, weaknesses, opportunities, and threats. 

To better understand the SWOT analysis of Bajaj Finserv, refer to the infographic below:

SWOT Analysis of Bajaj Finserv - SWOT Infographics of Bajaj Finserv

Let’s proceed further with expanding on the strengths of the Bajaj Finserv from the SWOT analysis of Bajaj Finserv

Strengths of Bajaj Finserv

Strengths express what an organization excels at doing and what differentiates it from the competition: a strong brand, loyal customer base, a strong balance sheet, unique technology, and so on. Bajaj Finserv must then decide on how to use those outcomes to attract emerging investors.

  • Large Range of Financial Products: One of the strengths of Bajaj Finserv is its ability to offer a wide range of financial services to its massive customer base. Securities and investments were created to provide its customer base short-term or long-term financial gains.
  • High Revenue Turnover: Bajaj Finserv has had a steady increase over the years in revenue even during and after the advent of Covid 19. Revenue is upheld by an enormous extent of good management structure, marketing strategies, solid financial product development, and cost-cutting techniques. 
  • Solid Capital Structure: Maintaining a growing capital structure is one of the base objectives of a business that Bajaj Finserv is upholding. In the course of the last five fiscal years, the gathering has raised Rs 14908 crores of value which has fundamentally expanded the net worth of the organization.
  • High Returns on Investment (ROI): Over the past five years now, Bajaj Finserv has been giving its shareholders high returns on investments through its stocks traded on the exchange Year on Year(YoY). 
  • Swift Financial Services: Another strength of Bajaj Finserv is that its customers get quick services and this is one of the unique strengths of Bajaj Finserv which provides the customers with one-stop-shop financial offers in three minutes which has now reduced to 3 seconds.


Weaknesses of Bajaj Finserv

Weaknesses limit an organization from achieving its ideal level. To remain competitive they are part of the business that needs improvement: for example, a weak brand, higher average turnover, high levels of debt, an inadequate supply chain, or lack of capital.

  • Decreased Mutual Funds Holdings: The mutual funds holding of Bajaj Finserv has dropped drastically in the past quarters. Mutual funds diminished their shareholding last quarter, a decline in net profit with falling profit margin quarter on quarter(QoQ), companies with high gearing ratio, companies with weak financials.
  • Non-Performing Assets of Bajaj Finserv: The major setback of the financial service sector is NPAs (Non-Performing Assets). Typically, NPAs denote loans that are not recoverable. This inevitably leads to financial losses for Bajaj Finserv. 
  • Lack of Coverage in Rural Areas of Financial Products: It has been revealed that the financial service industry focuses more on urban areas in most countries, while rural regions are ignored. In the banking sector, this is a considerable weakness.


Opportunities for Bajaj Finserv

Opportunities refer to favourable external components that could give an organization a competitive edge. For example, if a country cuts tariffs, increasing sales and market share.

  • Global Opportunities for Bajaj Finserv: A major opportunity for financial service players in the Indian market is the global financial service market, it is inarguably that the global market is worth billions of dollars. Bajaj Finserv is mainly focused on the Indian market, which it needs to increase its reach outside the Indian market as well making it gain more customers.
  • Rise in the Private Banking Sector Globally: The financial service industry around the world is highly regulated by the public sector authorities and their respective central banks. With the emergence of private sector banks, this sector is experiencing structural and functional shifts, primarily due to the adaptation of new technology and intensified competition, thereby benefiting end customers.

SWOT Analysis of Bajaj Finserv - Bajaj Finserv Digital Health EMI
(Bajaj Finserv Digital Health EMI, Source: Facebook)

  • Advancements in Technology in the Banking Sector: The banking industry has always functioned based on technology. This is evident that digital services provided by banks today are based on technology. Thus, banks should continue to adopt the latest technological advances. To draw future generations, they should focus on putting out newer banking and financial service using digital marketing skills.

Wait a minute. You might be thinking that what are digital marketing skills? Well, digital marketing skills include various subparts of digital marketing such as website building, SEO, social media marketing, e-commerce, online reputation and many more. You can check out IIDE 13+ short term courses in digital marketing which includes all of these. These courses can get you up to speed in as little as 5 days in a range of digital skills and expertise. 


Threats to Bajaj Finserv

Threats refer to components that have the potential to damage an organization. For example, unfavourable government policies, drastic decline in revenue. Other common threats include things like rising costs for materials, increasing competition, and tight labour supply, and so on.

  • Government Policies: Government regulations can directly affect the banking sector of a country, these government policies might be unfavourable for Bajaj Finserv. 
  • Global Uncertainty in the Financial Ecosystem: The world is going through difficult economic times at the moment. The international banking sector has all been affected by trade wars, protectionist policies, and economic downturns. If the world’s economic conditions do not change, the financial service industry will face a bleak future.
  • Lack of Proper Cyber Security Systems: The current banking industry relies entirely on the cyber-world. Whether it is data storage, monetary transactions, or personal information, everything is stored digitally. This makes the banking sector a primary target for hackers who are seeking to benefit financially by leveraging flaws in the bank’s digital infrastructure. Banks need to take effective cybersecurity steps to safeguard their records, they will face a significant cyberspace threat.

This ends our study on the SWOT analysis of Bajaj Finserv. Let us conclude our learning below.

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To Conclude

The financial service industry is one of the fastest-changing and growing industries in the world. Financial service companies are adopting new technologies to increase their business. They have also contributed in general to the world’s economic growth. 

But their shortcomings, such as Non-performing Assets (NPAs) and a lack of adequate rural presence, must be tackled. The exciting news is that by providing quality service and growing into untapped regions, they will work towards turning these weaknesses into strengths and threats into opportunities.

With a huge increase in the service industry. There is a very high competition where marketing plays a crucial role-taking advantage of technology not merely in this industry in which every other company is focusing on digital marketing to rise ahead of each other.  If you have the curiosity to learn you may check out IIDE’s 3 Month Advanced Online Digital Marketing Course to know more.

We hope this blog on the SWOT analysis of Bajaj Finserv has given you a good insight into the company’s strengths, weaknesses, opportunities and threats.

If you enjoy in-depth company research just like the SWOT analysis of Bajaj Finserv, check out our IIDE Knowledge portal for more fascinating case studies.

Thank you for investing your valuable time to read this, and do share your thoughts on this case study of the SWOT analysis of Bajaj Finserv in the comments section below. 

Lead Trainer & Head of Learning & Development at IIDE

Leads the Learning & Development segment at IIDE. He is a Content Marketing Expert and has trained 6000+ students and working professionals on various topics of Digital Marketing. He has been a guest speaker at prominent colleges in India including IIMs......[Read full bio]

Aditya Shastri

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