Bajaj Finance Q4 Results Review - Staring At A Weaker Year Ahead; Downgrade To Neutral: Motilal Oswal

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..Motilal Oswal Report.Bajaj Finance Ltd.’s Q4 FY24 reported profit after tax grew ~21% YoY to ~Rs 38.2 billion (in line), while FY24 PAT rose ~26% YoY to Rs 144.5 billion.Net interest income grew 28% YoY to ~Rs 80.1 billion (in line). Non-interest income was up 12% YoY, and net total income rose 25% YoY to ~Rs 97.1 billion (in line). Bajaj Finance’s Q4 FY24 NIM (calculated) contracted ~20 bp QoQ to ~10%.  While the change in the assets under management mix will be gradual, the AUM growth in FY25 will be supported by mortgages, commercial, SME, and newer product segments such as cars, loan-against-property, and tractors. Higher growth in the secured product segments will keep yields under pressure. Further, we expect its CoB to increase for a large part of FY25.We have cut our FY25/FY26 PAT estimates by 7%/6% to factor in a higher NIM compression, a decline in fee income, and elevated credit costs. We model an AUM/PAT CAGR of ~27%/25% over FY24-FY26 and expect Bajaj Finance to deliver an return on asset/return on equity of ~4.3%/22% in FY26. Downgrade the stock to Neutral with a target price of Rs 7,800 (premised on 4.3 tims FY26E price/book value)..Click on the attachment to read the full report: .Bajaj Finance Q4 Results: Profit Up 20% On Higher Other Income.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 Q4 Results Review - Staring At A Weaker Year Ahead; Downgrade To Neutral: Motilal Oswal

Earnings inline; net interest margin contracts ~20 bp QoQ

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