Bajaj Finance Ltd. share price target

Bajaj Finance Ltd (BAF) has released its mid-quarter update highlighting the impact of the second COVID wave on AUM (INR40-50b, 3% of outstanding AUM) and provisioning (INR11-13b, 0.8% additional credit cost). A large portion of the provisioning is likely to be up-fronted in 1Q. New origination in B2B/other businesses are down to 40/60% vs planned level in May. We have tweaked our estimate based on the revised guidance. Despite an earnings cut of ~11% for FY22, ROEs are likely to be strong at 20%, and we believe the impact is likely to be transient. With the process of unlocking having...

Net Interest Income declined marginally 0.5% YoY to Rs. 4,655cr. AUM improved multi quarter high 3.9% YoY on rising mortgage book. Pre-provisioning profit dropped 5.5% YoY Rs. 3,053cr on higher operating expenses. However net profit went up 42.0% YoY to Rs. 1,347cr on account of significant decline in provision expenses. Adequate provisioning owing to COVID, better asset quality and higher collection efficiency should provide strong base for further growth. We reiterate our BUY rating on the stock with a revised target price of Rs....

provisions. Profit in the same quarter of the previous year was Rs 948.1 crore. During the quarter, the company has done accelerated writeoffs of around Rs 1,530 crore of principal outstanding on account of COVID-19 related stress and advancement of its writeoff...

surprise on asset quality. While continued accelerated write-offs supported NPA decline (107bpsQoQ to 1.8%), bounce rates and collections are back to pre-COVID levels. Barring auto and mortgages that remained pain-points, the Co.'s OTR portfolio (now part of Stage 2) remains under stress led by 36% unsecured assets, 57% secured and one large B2B account (6% of total OTR). In light of higher provisioning (58%PCR, 181bps on Stage 1 & 2) and upbeat...

Bajaj Finance posted a steady set of numbers on the business and operational front with QoQ improvement in AUM, profitability being boosted by lower provisions. With high frequency risk, collections not warranting risk stance change guidance remains the same. Hence, it is a welcome sign. Net interest income was marginally down 0.5% YoY but increased 8.4% QoQ to | 4655 crore. Interest reversals for the quarter were at | 298 crore vs. | 122 crore YoY, | 450 crore QoQ. Opex increased ~16% QoQ owing to rise in business activity and as a result C/I ratio was up from ~32% to 34.5%...

We maintain a Sell on the stock with a revised target of Rs 4410 (5x FY23E ABV).

In Q3FY21, Net Interest Income rose 3.3% QoQ to Rs. 4,293cr, with improvement in business volume across segments. Pre-provisioning profit stood at Rs. 2,906cr (-3.3% YoY) and provisions at Rs. 1,352cr....

Bajaj Finance has posted 29% decline in the net profit to Rs 1145.98 for the quarter ended December 2020 (Q3FY2021). Income from operations on a consolidated basis fell 6% to Rs 5722.46 crore, while other income rose 2% to Rs 936.01 crore. Total income eased 5% to Rs...

We maintain a Sell on the stock with a revised target of Rs 4350 (5x FY23E ABV).

During the quarter, the Company has also done one-time principal write-off of 1,970 crore, on account of Covid related stress. The Company holds management overlay provision of 800 crore as of 31 December 2020 for Covid related stress. Consolidated AUM witnessed QoQ growth of 4% YoY to | 143550 crore, declining 1% YoY. The Company expects core AUM growth to resume to pre-Covid levels by Q4FY21. Consumer B2B declined 16% YoY but improved 10% QoQ to | 22893 crore. NII declined 4% YoY to | 4296 crore, in line with estimates. NII for the quarter...