Bajaj Finance Ltd. share price target

BAF continued its strong performance in Q2, with consolidated AUM growing 38%YoY led by growth in consumer/rural/mortgages segments. PAT rose 63% YoY with improving spreads demonstrating its ability to dominate pricing and lower corporate tax.

Existing customers contributed to 70% of new loans booked vs. 66% in Q2FY19. Existing customer share was higher due to tightening of credit standards across most sales finance businesses in Q2FY20. Capital adequacy ratio marginally improved to 19.7% vs. 19.5% in Q1FY20, and Tier-I ratio stood at 15.9%, while liquidity buffer surplus (free cash and liquid investments) was at Rs. 8,043cr. Given challenging valuations and credit cost pressures, we maintain our...

Headline asset quality remained stable with GNPA ratio at 1.61% and NNPA ratio at 0.65%. Adjusted for IL&FS; exposure, GNPA, NNPA were at 1.44%, 0.52%, respectively, as of September 30, 2019. Total slippages for the quarter were at | 786 crore vs. | 702 crore QoQ while write-off was at | 293 crore. Auto finance B2B and rural B2B contributed to the same. The provision coverage ratio dipped 1%to 60%QoQ. Overall standard assets provisioning (ECL stage 1 and 2) was 91 bps (vs. 100 bps earlier). Customer franchise as of Q2FY20 rose 29% YoY to 38.7 million from 36.9...

Bajaj Finance (BFL) has posted steady results for Q2FY20 with the net interest income (NII) rose by 48.3% YOY to Rs3998 crore (we expected growth of 41.5% YOY) while the Net profit jumped by 63.1% YoY to Rs1506 crore (we expected growth of 40.8% YOY). The performance was benefitted by lower corporate tax rate. Asset under management grew smartly by 38% YoY while new loans booked during the quarter increased by 23% YoY. Asset quality during the quarter remained stable as GNPA ratio stood at 1.61% versus 1.60% in the previous...

Consolidated PAT grew 43% YoY to Rs 1,195cr in Q1FY20 characterized by continued strong AUM growth (41% YoY) coupled with stable margins/asset quality. AUM growth in consumer B2B financing was robust at 31% YoY, driven by +60 YoY growth in 2W/3W finance.

Asset under management (AUM) increased 41.2% YoY to Rs. 128,898cr in Q1FY20, in-line with the provisional numbers announced a month ago; mortgage lending up 44.7% in Q1FY20. Provisions grew 69% YoY to Rs. 551cr in Q1FY20 (vs. strong Q1FY19) GNPA/NNPA ratio stood at 1.60%/0.64% (vs. 1.54%/0.63% in Q4FY19),...

Bajaj Finance a structural play ........................................................................ 5 BAF: diversified lending model .............................................................................. 6 BAF's Consumer lending to expand at 30% CAGR over FY19-21E ............... 7 BAF's formidable play in consumer lending market ......................................... 10 Consumer credit growth intact ...................................................................... 10 Higher Bajaj Auto sales penetration to aid consumer lending ...................... 11 Distribution network to expand at 30% CAGR (FY19-21E) .......................... 11 Customer addition at 1 mn/quarter remains strong....................................... 12...

Strong quarter; early signs of concern. Maintain Accumulate Bajaj Finance posted another strong quarter, with PAT growing at 43% YoY on an AUM growth of 41%, (38% YoY excluding IPO financing). The negatives were a 6 bps increase in GNPA and caution on 2W/3W and digital products. The two account for 11% of the book. Except the mortgage portfolio, all portfolios witnessed a deterioration in asset quality. The GNPA rose 61% YoY, faster than the book growth. We have reduced our earnings by 3%/2% in FY20 and FY21 respectively to factor higher credit costs. We maintain our rating and multiple,...

Bajaj Finance Ltd.s disbursements to small businesses and consumers fell on stricter lending criteria amid a consumption slowdown even as the non-bank lender met profit estimates in the June quarter. Bajaj Finance has continued to post robust 43% growth in the net profit to Rs 1195.25 for the...

Bajaj Finance continued its healthy performance, with loan, earnings growth momentum remaining healthy, though below our expectation. Consolidated AUM including housing witnessed growth of 41% YoY to | 128898 crore, largely led by rural & consumer B2B auto segment. SME grew 36% YoY to | 16334 crore while consumer segment increased 42.5% YoY to | 49883 crore. Housing subsidiary credit increased 48% QoQ to | 21054 crore. Standalone Bajaj Finance AUM grew 25% YoY to | 107949 crore. Consolidated AUM mix of consumer: rural: SME: commercial: mortgages...