Earnings Outlook
Bajaj Fin Jul-Sept PAT seen up 30% on healthy loan growth
This story was originally published at 15:59 IST on 21 October 2024
Register to read our real-time news.Informist, Monday, Oct. 21, 2024
NEW DELHI – Bajaj Finance Ltd. is expected to report a 30% increase in its net profit for Jul-Sept to INR 46.08 billion, according to an average of estimates from eight brokerages, with healthy growth in loans seen pushing up the bottom line, although margins are seen under pressure due to higher cost of funds.
The non-banking financial company will announce its quarterly results on Tuesday. Its shares traded 1.8% lower at INR 6,776.60 on the National Stock Exchange at 1444 IST on Monday.
The lender had informed the exchanges earlier this month that its assets under management rose by 29% on year to stand at INR 3.74 trillion as on Sept. 30, growing by around INR 197 billion in the second quarter of 2024-25 (Apr-Mar). According to brokerages, this should lead to a 30.5% increase in Bajaj Finance's net interest income to INR 93.92 billion in Jul-Sept.
The lender's net profit in Jul-Sept will also be boosted by the sale of a stake in Bajaj Housing Finance, which fetched over INR 60 billion at its initial public offering in September. Kotak Institutional Equities is building in post-tax capital gains of INR 19.8 billion. Excluding this, Bajaj Finance's net profit for Jul-Sept is seen 17% higher. The presence of this one-off item has led to a wide range of estimates for Bajaj Finance's net profit for the quarter. While Elara Securities, Emkay Global Financial Services, KR Choksey, Motilal Oswal Financial Services, Nirmal Bang, and Sharekhan see the bottom line in the range of INR 40 billion-45 billion, Axis Securities and Kotak Institutional Equities have pegged it substantially higher at around INR 60 billion.
In Apr-Jun, the shadow bank's net profit was INR 39.12 billion while the net interest income was INR 83.65 billion. Its assets under management stood 31% higher as on Jun. 30, rising by INR 235.77 billion during Apr-Jun. This decline in AUM growth, according to Motilal Oswal Financial Services, "indicates a slowdown (or calibration in growth) in unsecured products like personal loans and business loans".
Emkay Global Financial Services was in agreement, saying in a pre-earnings report that it saw a "slowdown in unsecured personal and consumer segments" in Jul-Sept. Margins, meanwhile, "are expected to remain under pressure due to moderating yield on account of changing product mix and elevated CoFs (cost of funds)," Emkay added. Analysts from Axis Securities and KR Choksey, among others, echoed this view.
In Apr-Jun, Bajaj Finance's cost of funds was 7.94%, an increase of 8 basis points over Jan-Mar. This contributed to the net interest margin compressing by 23 bps in Apr-Jun compared with the previous quarter.
Analysts are also keeping an eye on the lender's business regarding its 'eCOM' and 'Insta EMI Card' products. In November, the Reserve Bank of India barred Bajaj Finance from sanctioning and disbursing loans under the aforementioned products. The restriction was subsequently removed in May.
Following are the Jul-Sept earnings estimates for Bajaj Finance, based on reports from eight brokerage houses:
|
BROKERAGE |
NET INTEREST INCOME (in INR million) |
NET PROFIT (in INR million) |
|
Axis Securities |
88,700.00 | 59,440.00 |
| Elara Securities | 110,438.00 | 41,112.00 |
|
Emkay Global Financial Services Ltd |
89,163.00 | 41,356.00 |
|
Kotak Institutional Equities |
89,033.00 | 60,829.00 |
| KR Choksey Research | 88,504.00 | 40,524.00 |
|
Motilal Oswal Financial Services |
88,549.00 | 40,155.00 |
|
Nirmal Bang Equities |
108,493.00 | 44,929.00 |
|
Sharekhan Ltd |
88,460.00 | 40,320.00 |
|
Average |
93,917.50 |
46,083.13 |
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Reported by Siddharth Upasani
Edited by Vidhi Verma
For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.
Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.
Informist Media Tel +91 (11) 4220-1000
Send comments to feedback@informistmedia.com
© Informist Media Pvt. Ltd. 2024. All rights reserved.
To read more please subscribe
Share this Story:
