Result date: 20th October, 2022
Recommendation: Add
Target price: Rs7,900
In the September 2022 quarter, the Assets Under Management (AUM) of Bajaj Finance grew 7 sequentially and 31% over the year-ago quarter. New loan bookings were down 8.4% sequentially to 6.8 million. Consequently, the net interest income or NII is likely to grow at a robust 33% over the year-ago quarter and 9% sequentially.
The company’s Net Interest Margin or NIM could expand sequentially, due to higher yields, aided by growth in the high-yielding consumer B2B business. Cost-to-income ratio is likely to remain in the 35-36% range.
Analysts at IIFL Securities bake-in moderation in credit cost to 1.45% (1.65% in Q1FY23).
Hefty reduction in provisions could drive a 93% growth in Profit After Tax (PAT) over the year-ago quarter.
Important management insights to watch out for:
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Credit demand across key segments
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Asset quality trends
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Margin outlook
|
Rs. Billion |
September 2022 estimates |
QoQ change |
YoY change |
|
Net Interest Income (Ex assignment income) |
57.2 |
9% |
33% |
|
Net Operating Income |
71.3 |
7% |
34% |
|
Pre-Provisioning Operating Profit |
45.6 |
7% |
38% |
|
Provisions |
7.0 |
(7)% |
(46)% |
|
Profit After Tax |
28.6 |
10% |
93% |
|
AUM |
2,184 |
7% |
31% |
|
Borrowings |
1,877 |
9% |
29% |
Source: Company, IIFL Research
