Bajaj Finance Q1 Results Review - Steady Growth, Operational Performance: Nirmal Bang

Nirmal Bang Report

Key Points

• Bajaj Finance Ltd.’s Q1 FY24 performance was better than our expectations, with net interest income/pre-provision operating profit/profit after tax being at a variation of 4.6%/6.6%/9.4% versus our estimates.

• Profit after tax increased by 32.4% YoY on the back of 32% YoY assets under management growth, slower growth in opex and credit costs being under control. The management maintains its AUM growth guidance of 29-31%, which will come from all segments.

• Net interest margin is expected to moderate over the remaining part of FY24. As majority of the investments have been completed, opex cost peaked out in Q4 FY23 and is expected to moderate going ahead.

• We roll forward our valuation to June 2025E adjusted book value of Rs 1,445 and assign a multiple of 5.5 times, based on which we derive a target price of Rs 7,948 (as against Rs 7,000 earlier, valued at 5.2 times FY25E ABV), which reflects an upside of 7%.

• Bajaj Finance’s comfortable asset quality, revamped digital and collection infrastructure and its business transformation initiatives to revive growth are factors which give us confidence about good earnings growth in the coming quarters.

• However, the positives are already factored in the rich valuation of 5.4 times FY25E ABV and hence we revise our rating from ‘Buy’ to an ‘Accumulate’.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.