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Bajaj Finance stock rises over 3% ahead of Q2 earnings, here’s what to expect

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Bajaj Finance shares rose over 3% today ahead of the non-banking finance company’s (NBFC) September quarter earnings set to be announced today.

The large cap stock has gained after 3 days of consecutive fall. The shares touched an intraday high of Rs 7,887, rising 3.17% against previous close of Rs 7,644.35 on BSE.

Bajaj Finance stock is trading higher than 5-day, 20-day, 50-day, 100-day and 200-day moving averages.

Bajaj Finance shares have gained 136% in one year and risen 47% since the beginning of this year.

Total 0.17 lakh shares of the firm changed hands amounting to turnover of Rs 12.94 crore.

Market cap of the firm rose to Rs 4.71 lakh crore on BSE.

The stock hit 52-week high of Rs 8,020 on October 18, 2021 and 52-week low of Rs 3,238 on October 26, 2020.

The NBFC is likely to report an over 70% growth in net profit on the back of a 19% rise in net interest income (NII) for the quarter ended September.

“We expect NII to grow 19% YoY to Rs 4,951 crore. NIM is expected to be stable as growth in both consumer and mortgage books should be strong. Provisions are expected to moderate to Rs 1,230 crore, as the unlocking of the economy continues. PAT is estimated to increase 73 per cent YoY to Rs 1,670 crore,” said ICICI Securities.

Nirmal Bang Institutional Equities sees Bajaj Finance reporting a 68.8% YoY rise in net profit at Rs 1,628.70 crore backed by a 21.5% YoY rise in NII at Rs 4,837.40 crore.

“Loans and advances are seen growing at 21.7% YoY while deposits are seen rising 11.2% YoY. Net interest margin (NIM) is seen flat at 9.9%. Credit cost could fall 190 basis points YoY (148 bps QoQ) to 3%,” the brokerage added.

Bajaj Finance is likely to report a 4.8% QoQ rise in assets under management (AUM) in Q2, according to Kotak.

“Pickup in consumer loan disbursements and strong traction in the housing segment are key drivers. Gradual decline in cost of funds over the past few quarters will drive 15 bps YoY expansion in NIM to 10.2% (up 55 bps QoQ),” the brokerage said.

Higher business volumes are likely to push cost-to-average AUM ratio to 3.7% (up 31 bps YoY), albeit lower than pre-Covid levels of 4.2-4.6%, the brokerage said.

It expects a 20% YoY growth in net interest income and 52% rise in profit

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