Bajaj Finance Q1 hits a rough patch, asset quality loses balance
The stock upside hinges on progress of digital plans
July 22, 2021 / 03:37 PM IST
PRO Only Highlights
Quarterly performance largely backed by improved realisations
Medium-term triggers China plus and protectionist measures for tyre industry
Valuations not inexpensive; but improved medium-term outlook
Bajaj Finance (BFL) (CMP: Rs 5,938; MCAP: Rs 358,408 crore) has posted weak earnings for the first quarter of FY22. Net profit increased by a mere 4 per cent year on year (YoY) in the reported quarter. Asset quality deteriorated sharply leading to a reversal of interest income, a rise in provisions and write-offs, which dragged down profits. Obviously, the muted performance during the quarter was due to the business getting impacted by the second wave of the pandemic.