Shares of Bajaj Finance ended lower almost 1 per cent after Macquarie initiated coverage on the stock with an underperform rating and a target price of Rs 4,500, in a report titled “Past its Prime’’.

The non-bank lender settled with losses of 0.98 percent or Rs 57.70 at Rs 5,859.90on the BSE. The counter has a market cap of Rs 3.5 lakh crore. The target price implies a downside of 23 per cent from the present levels.

The underperform rating on Bajaj Finance which is oneof the largest NBFCs in the country is against consensus with around 18 brokerages giving it a buy rating and another seven having a hold, asper Bloomberg data.

Macquarie said the NBFCis weak on online sales, which is the emerging trend in the market and which is far more competitive and crowded than the offline business.

According to the brokerage, the company’s growth profile will moderate and it will deliver 20 per cent assets under management (AUM)CAGR over the financial year spanning 2022-26, which is sharply lower than the 35 percent CAGR witnessed over2017-18 to 2019-20.

In the July 6 report by Param Subramanian and Suresh Ganapathy, Macquarie said though the NBFCis launching an app, the digital transition will be difficult as it requires a reset from being a business-to-business (B2B)financier to a business-to-consumer (B2C) company.

On Tuesday, Bajaj Finance provided its quarterly business update where it said that core AUM (assets under management) stood at Rs 2.04 lakh crore as of June 30, 2022compared with Rs 1.56 lakh crore in the same period of the previous year — a rise of 31per cent.

New loans booked during the first quarter stood at 74lakh compared with 46 lakh in the year-ago period.

The Macquarie analysts pointed out that Bajaj Financelargely acquires customers who buy consumer durables at shops. Purchases of these items have shifted online where the NBFC is weak.

It added that the new customers acquired is still flattish compared with 2018-19.

Besides, ventures into super-app in India have largely not worked.