Bajaj Finance Q3 Results Review - Lower Margins, Higher Credit Cost Impact Profitability: Systematix

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Systematix Report.Bajaj Finance Ltd.'s Q3 FY24 operational performance was in-line with consensus estimates. Net interest income/operating profit came in at Rs 76.5 billion / Rs 61.4 billion (versus consensus estimate of Rs 75.7 billion / Rs 62.1 billion) registering a growth of 29% YoY/ 27% YoY.Net interest margin declined by 11 basis points QoQ mainly due to higher cost of funds. The company has increased rates by 20-30 bps across all products w.e.f January 1, 2024 to mitigate higher incremental cost of funds and increase in risk weights.Assets under management growth was strong at 35% YoY led by strong growth across product segments (ex-Rural B2C). The growth in the rural B2C segment has slowed down (2.6% QoQ) as management remains cautious of delinquency trends in this segment.Asset quality broadly steady with GS3/NS3 at 0.95%/0.37% (up 4 bps / 6 bps QoQ). Credit cost elevates to 1.7% (up 12 bps QoQ) mainly due to stress in Urban/ Rural business-to-consumer segment. As a result, profit after tax came in marginally lower than consensus estimate at Rs 36.3 billion registered a growth of 22% YoY.Bajaj Finance has delivered a healthy ~25% AUM compound annual growth over the last five years driven by its strong customer acquisition via omni channel strategy and cross selling of loans. At current market price, Bajaj Finance is trading at ~4 times FY26 book value (consensus), we believe the recent correction in stock offers good entry opportunity..Click on the attachment to read the full report:.Tata Motors Market Cap Overtakes Maruti Suzuki After Over Seven Years.DISCLAIMERThis report is authored by an external party. NDTV Profit 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 NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Bajaj Finance Q3 Results Review - Lower Margins, Higher Credit Cost Impact Profitability: Systematix

Bajaj Finance has delivered a healthy ~25% AUM compound annual growth over the last five years driven by its strong customer acquisition via omni channel strategy and cross selling of loans.

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Bajaj Finance Q3 Results Review - Lower Margins, Higher Credit Cost Impact Profitability: Systematix

Bajaj Finance has delivered a healthy ~25% AUM compound annual growth over the last five years driven by its strong customer acquisition via omni channel strategy and cross selling of loans.

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