Bajaj Finance likely to report strong earnings in Q1; key things to watch out for

Non-banking finance company Bajaj Finance is expected to report another robust set of numbers for the June quarter on July 19. Brokerages estimate the company's bottomline to rise 35-45 percent YoY and its net interest income to increase 30-40 percent. Assets under management (AUM) are seen increasing 35 percent compared to last year's quarter.

"For Bajaj Finance, Q1 and Q3 are seasonally strong quarters in terms of asset growth. We expect AUM to increase by 37 percent YoY to Rs 94,093 crore led by the consumer finance segment and in that mainly aided by the consumer durable segment," ICICI Securities said in its research note.

The brokerage said the company's calculated NIMs are expected to come in higher than 11 percent. "No negative surprise is expected on the asset quality front. PAT of Rs 869 crore is estimated, up 44 percent YoY," it said.

KR Choksey expects Bajaj Finance's AUM to grow 35 percent YoY, owing to the company's dominant position in the consumer finance segment.

"We expect stable NIMs of 11.5 percent to aid NII growth of 29 percent. Reducing asset quality pressure should translate into lower credit costs, aiding PAT of Rs 830 crore, up 37 percent YoY," KR Choksey said.

The brokerage said that cost structure will need to be monitored as the company has been making investments in tech and digital (as part of BFL 2.0) and expanding its branches.

"Further, commentary on reviving SME lending and scaling up BHFL (housing finance sub) will need to be watched out for," it said

Kotak expects the NBFC to report loan growth of 35 percent, which along with a stable NIM, will push NII up 36 percent. "Cost-income will remain stable at 44 percent YoY," the brokerage said.

At 15:14 hours IST, the stock price was quoting at Rs 2,487.40, up Rs 15.35, or 0.62 percent after hitting a record high of Rs 2,521.70 on the BSE.