Moneycontrol PRO

Bajaj Finance stock in focus after Q2 profit jumps 53% YoY; brokerages expect 14% further upside

Bajaj Finance, a non-banking finance company, clocked a 53.5 percent year-on-year growth in consolidated profit at Rs 1,481 crore in September 2021 quarter following lower provisions and improvement in asset quality.

October 27, 2021 / 10:03 AM IST
 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

Bajaj Finance share price is in focus, a day after the company declared its September quarter results.

The leading non-banking finance company clocked a 53.5 percent year-on-year growth in consolidated profit at Rs 1,481 crore in September 2021 quarter following lower provisions and improvement in asset quality.

Consolidated net interest income for the quarter at Rs 5,335 crore grew by 28 percent compared to the year-ago period, the Bajaj Group Company said in its BSE filing. "Interest income reversal for the quarter was Rs 322 crore as compared to Rs 216 crore in Q2FY21," it said.

New loans booked during the quarter were 6.33 million, up from 3.62 million in the corresponding period last fiscal.

The stock has surged over 131 percent in the last 1 year and was trading at Rs 7,638, down Rs 211.15, or 2.69 percent at 10:02 hours. It has touched an intraday high of Rs 7,919.25 and an intraday low of Rs 7,536.15.

Close

Catch all the market action on our live blog

Global research firm Morgan Stanley has an overweight call on the stock and has raised target to Rs 9,060 per share, an upside of over 14 percent from current level. It is of the view that the earnings momentum is set to pick up significantly adding that decibels around new initiatives will also rise, according to a CNBC-TV18 report.

"Valuation is not cheap, but stocks seldom pause against such a backdrop," it added.

Domestic research and broking firm Motilal Oswal has retained its buy recommendation on the stock with target of Rs 8,650 per share, an upside of 10 percent from the current market price.

"We expect the stock to deliver a RoA/RoE of 4.4-4.7 percent/21-23 percent over FY23-24E. Given the expected recovery in asset quality in 2HFY22 and the sustained milestones-driven progress made by Bajaj Finance in its digital transformation program, we reiterate our buy rating with a target of Rs 8,650 per share (9x Sep’23E BVPS)," it added.

Bajaj Finance's margin is likely to sustain on lower cost of funds, reduced liquidity, and normalization in interest reversals. We expect the stock to be able to deliver a quarterly run-rate in AUM growth similar to pre-COVID levels in 2HFY22. Provided there is no new COVID wave, we expect the company to contain credit costs ~2.8% in FY22, it said.

Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol advises users to check with certified experts before taking any investment decisions.
Moneycontrol News
first published: Oct 27, 2021 09:48 am

stay updated

Get Daily News on your Browser
Sections
ISO 27001 - BSI Assurance Mark