Bajaj Finance Ltd. share price target

Bajaj Finance (BAF) in its business update for the quarter ended September 2020 reported muted AUM growth of 1.3% YoY and almost flattish QoQ growth at Rs 1,37,300cr. Management loan growth guidance is 5% for FY21. New loans booked stood at 36lac vs 65 lac YoY but better than 5.3lac in Q1FY21.

IIP improves further

Q1FY21 AUM grew 7.1% YoY to Rs. 138,055cr. As of June 30 th, 15.7% of the consolidated AUM was under moratorium. Net Interest Income rose 12.4% YoY to Rs. 4,151cr in 1QFY21. However PAT fell 19.5% YoY due to continued high provisioning (+206.1% YoY). As of 30th June i) Capital adequacy ratio stood at 26.4%; ii) Tier I capital at 22.6%; iii) Gross NPA at 1.4%; iv) Net NPA at 0.5% and v) PCR at 65%. Outlook remains positive for the stock with continuous reduction in provision coupled with company's focus on capital preservation,...

Depreciation moved up 34% to Rs 84.22 crore, while loan loss provisions zoomed 206% to Rs 1685.73 crore in Q1FY2021. PBT dipped 29% to Rs 1309.69 crore. Effective tax rate declined to 26.5% in Q1FY2021 from 35.4% in Q1FY2020. Net Profit of the company fell 19% to Rs 962.32...

Bajaj Finance (BAF) reported 7% YoY AUM growth in Q1FY21.

Bajaj Finance (BAF) reported PAT of Rs 962cr down 19.5% YoY and up 1.5% QoQ, better than expectations on higher other income and improved C-I. However AUM growth was muted at 7% YoY impacted by lockdown and elevated provisions at Rs 1686cr. Asset quality improved with GNPA down 21 bps QoQ to 1.4%

21 July 2020 Bajaj Finance (BAF)s 1QFY21 PAT declined ~20% YoY to INR9.6b (8% beat). Other operating income of INR8.6b (v/s est. of INR4.6b) led to PPoP (+25% YoY) beat of 12%. NII and opex were in line with expectations. As of June end, ~16% of the consol. (INR217b), as against 27% in April (INR386b). The reduction was driven by the Auto, Rural, and SME segments (refer to Exhibit 9). The conversion of term loans into flexi loans led to ~22% (INR36b) of overall decline. GNPA declined 20bp QoQ to 1.4%, aided by high write-off of INR4b. PCR increased 450bp QoQ to 65%.

Bajaj Finance Ltd (BFL) reported mixed Q1FY20 numbers, with tepid business growth, but a q-o-q improvement in asset quality and a decline in the moratorium to 15.7% of AUM from 27%, which is a positive. Assets under management (AUM) stood at Rs. 138,055 crore, down 6% q-o-q due to steps like more stringent loan-to-value ratios (LTVs), tightened credit filters, etc. which indicated a cautious outlook on growth by the management. However, growth guidance was moderated by 10-12% and a higher credit cost guidance of 100-110 bps (against ~80-100 BPS earlier) for FY21 were key notables. Net Interest Income (NII, calculated) stood at Rs 4150 crore, up by 12.5% y-o-y but was down by 11.3% on q-o-q...