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Q2FY23 Preview: Bajaj Finance: NII seen at Rs57.2 billion, PAT at Rs28.6 billion

  • India Infoline News Service |
  • 18 Oct, 2022 |
  • 10:38 AM
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:
  • Credit demand across key segments
  • Asset quality trends
  • 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

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