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

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)

 

(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:

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.

(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.

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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.