Bajaj Finance Ltd. share price target

We expect further growth in advances in the coming months, as festive season kicks in. However, it remains to be seen, how the company fares on managing its NPA levels as well as the progress on its transformation initiative. The stock has rallied in recent past, and there's limited upside potential seen from current levels. We therefore maintain our HOLD rating with a revised target price of Rs. 7,898 based on 11x FY23E BVPS. Credit growth revival aids topline During Q2FY22, Bajaj Finance's net interest income rose 28.4% YoY to Rs. 5,334cr, led...

Bajaj Finance Q2FY22, Strong performance with improved loan growth and asset quality, in line with estimates Bajaj Finance has continued to post robust 53% growth in the net profit to Rs 1480.99 for the quarter ended September 2021 (Q2FY2022). Income from operations on a consolidated basis increased 16% to Rs 6687.34 crore, while other income jumped 38% to Rs 1044.72 crore. Total income moved up 19% to Rs 7732.06 crore in the quarter ended September 2021. Interest...

PAT was up 53% YoY and 48% QoQ to INR14.8b (8% miss) in 2QFY22. While NII at INR42.9b (10% beat) was up 26% YoY due to higher interest income from surplus liquidity and from IPO financing, it was mitigated by higher OPEX (up 48% QoQ and 40% above our estimate). Credit costs stood at INR13b (est. INR11b), which included additional COVID-19 provisions of INR3.5b in 2QFY22 to guard against contingencies from a potential third wave. GNPL ratio/PCR improved by ~50bp/~400bp QoQ to 2.45%/55%. The...

We revise our rating to HOLD from SELL with a revised target price of Rs 7,500.

Alternate Stock Idea: Apart from BAF, in our BFSI coverage we also like HDFC Ltd. HDFC Ltd is the largest housing finance company in India with a loan size of ~| 4.98 lakh crore. It has a presence in other financial services segments like life insurance, banking, AMC, etc, via its subsidiaries...

What should investors do? Bajaj Finance's share price has grown by ~7.2x over the past five years (from ~| 1100 levels in September 2016 to ~| 7800 levels in September 2021). Factoring in management agility towards product development...

BAF's return ratios have been consistent and also the highest in our Coverage Universe (excluding gold Financiers). Given the strong recovery post relaxation of the lockdowns and the healthy progress made in its digital transformation program (including wallets and payments), we reiterate our Buy rating, with a TP of INR7,700 per share (8x 1HFY24E BV)....

Impact of the pandemic lingers on, but the rising AUM, declining OpEx and growing deposits provide hope for improvements in asset quality, that in turn should lay the foundation for further growth. At current price levels however, we see limited upside potential and thereby...

We maintain a SELL on the stock with a target of Rs 4,300/share (5x FY23E ABV).

Bajaj Finance maintained strong operating metrics over various credit and rate cycles leading to >18% RoE and >3% RoA consistently Q1FY22 Results: Bajaj Finance reported lower-than-expected earnings led by...

Bajaj Finance (BAF)'s 1QFY22 PAT was up 4% YoY / down 26% QoQ to ~INR10b (27% miss). While NII at INR37b (5% miss) was up 12% YoY, opex was largely in-line. Provisions came in at INR17.5b v/s our estimate of INR15b. The company aggressively wrote off ~INR9.2b...

Bajaj Finance (BAF)'s Annual Report shares a glimpse of the management's two-pronged strategy implemented in FY21: a) conservatism and prudence and b) the acceleration of the business transformation plan. With the various steps taken during the pandemic, BAF is confident of achieving higher volumes, a leaner cost structure, and a strong digital platform offering superior services across the value chain. The focus throughout the year was on (a) capital management (Tier I of 25%+), (b) achieving abundant liquidity (1213% of borrowings), (c) lowering opex (opex to assets down 70bp), (d) expanding...

We maintain our Sell rating with a target price of Rs 4300/share (5x FY23E ABV) from Rs 4350/share earlier.

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...

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

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%...

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....