Shares of Bajaj Finance jumped 7 percent in morning trade as investors cheered strong results for September quarter.
Brokerage houses too were upbeat on the stock and maintained their positive stance on the stock. Highlighting that net profit was largely ahead of estimates, some also said that the asset quality was stable.
The company’s standalone profit grew 55 percent on year to Rs 920 crore. Profit in corresponding period last fiscal stood at Rs 594 crore.
Standalone net interest income during the quarter grew by 39 percent to Rs 2,665 crore compared to Rs 1,917 crore in same period last year.
Standalone assets under management increased 24 percent to Rs 89,876 crore and consolidated AUM grew by 38 percent to Rs 1,00,217 crore YoY, driven by consumer segment.
Brokerage: Morgan Stanley | Rating: Equalweight | Target: Rs 2,300
The global research firm said that September quarter’s net profit was ahead of estimates due to lower provisions. Net interest income and growth in assets under management (AUM) were in line with estimates.
Brokerage: JPMorgan | Rating: Overweight | Target: Rs 2,800
It said that Bajaj Finance’s Q2 show was another earnings beat, driven by opex performance. Asset quality saw a marginal blip sequentially, largely driven by the rural and LAP (Loan Against Property) book. It also highlighted that its loan growth momentum was intact and had a good funding profile as well.
Brokerage: Credit Suisse | Rating: Underperform | Target: Rs 1,500
Credit Suisse highlighted that experience on festive sales has been encouraging so far and Management expects similar growth. The management is confident on liquidity situation and has been able to raise funds from banks and debt markets. The asset quality is largely stable, except for some caution on two wheeler loans.
Brokerage: Citi | Rating: Neutral | Target: Rs 2,500
The research firm believes stock is fairly valued and maintains neutral stance. It has a target price of Rs 2,500. It raised FY19 / FY20 net profit estimates by 5% as it is adjusting adjust for 2QFY19 beat (higher AUM, lower opex).