Bajaj Finance Q3 Review - Calibrated Growth Approach To Maximize Return Ratios, Maintain BUY: Axis Securities

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Axis Securities Report.Bajaj Finance Ltd. added 3.85 million customers (+24/8% YoY/QoQ) during the quarter versus 3.1/3.6 million customer YoY/QoQ, taking the total customer base to 80.4 million customers (+22/5% YoY/QoQ). The company booked ~9.9 million loans during the quarter (+26/15% YoY/QoQ). The management had guided to add 13-14 million customers in FY24 thereby exiting with a customer base of 82.5-83 million customers..Encouraging operational performance: Net interest income grew by 29/6% YoY/QoQ aided by assets under management growth of 35/7% YoY/QoQ while margins (calculated on AAUM) contracted by ~11 bps QoQ (at the lower end of the guided range of 100-15 bps of margin contraction).Opex grew by 22/5% YoY and the cost-income ratio stood flat QoQ at ~33.9% versus 34% QoQ. Pre-provision operating profit grew by 27/5% YoY/QoQ.Credit costs inched up to 1.66% versus 1.54% QoQ. Earnings growth was at 22/2% YoY/QoQ. The Reserve Bank of India circular on increased risk weight on consumer credit exposure from 100% to 125% had an impact of 290 bps on CRAR. The tier-I capital was 22.8%..Asset Quality Steady: Gross/net non-performing asset inched up marginally to 0.95/0.37% versus 0.91/0.31% QoQ.Most segment ex-rural B2C continue to report healthy asset quality trends. Hence, the management has slowed down the pace of growth in the rural B2C book owing to higher delinquencies..Click on the attachment to read the full report:.Bajaj Finance Q3 Results Review -Elevated Credit Costs From B2C Businesses; NIM Contracts: Motilal Oswal.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Bajaj Finance Q3 Review - Calibrated Growth Approach To Maximize Return Ratios, Maintain BUY: Axis Securities

Given the increase in risk weights and higher incremental cost of funds, this to mitigate risk on NIMs, Bajaj Finance has increased rates by 20-30 bps across all portfolios.

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