Bajaj Finance strong Q2 update, AUM growth best in 11 Quarters
New Delhi: Bajaj finance has come up with a strong operational update in Q2FY23. The NBFC major has depicted strong growth across its key metrics. AUM stood at Rs 2,18,350cr with an uptick of 31% on YoY basis. AUM growth best in 11 quarters. New loans during Q2FY23 stood at 6.8 mn vs 6.3 mn in Q2FY22. Deposit book stood at Rs 39,400 cr vs Rs 28,720 cr, up 37% YoY basis. Customer Franchise grew by 19% to 62.9mn and increased by 2.6mn in Q2. The company’s liquidity position continues to remain strong. It continues to remain well capitalized with a Capital Adequacy Ratio of ~ 25.1%.
BOFA SEC Maintains BUY rating with Target Price Rs 8345/sh. It says Bajaj Finance depicted a strong pre-quarter update for Q2. Core assets under management (AUM) rose 7% QoQ. The brokerage believes the company is favourably placed given on improving its growth outlook. Digital transformation and “Omnipresence strategy” can support growth rates. It believes the company is Well-positioned for strong growth revival.
On the flip side, Macquarie maintains Underperform rating with Target Price of Rs 5000/sh. It believes AUM growth is ahead of estimates. The volume of loans booked is still flattish vs FY20. Flattish loan volume trends vs three years ago. It believes volume growth is still relevant. Digital transformation is all about volumes.
Consolidated AUM Growth YOY
Q1FY23: 28%
Q4FY22: 30%
Q3FY22: 26%
Q2FY22: 22%
Q1FY22: 15%
Q4FY21: 4%
Q3FY21: -1.1 %
Q2FY21: 1.3%
Q1FY21: 7%
Q4FY20: 28%
Q3FY20: 35%
Q2FY20: 38%
Q1FY20: 41%
Accelerating retail deposits acquisition to achieve its long-term goal of 25% of borrowings from deposits Opex to NII 35.9% in Q1 Expects Opex to NII to remain between 35-36% for FY23 Loan losses and Provisions Rs 755cr in Q1 Expects its loan losses at 1.35-1.45% of average assets in FY23 Web Platform On track Phase 1 is scheduled to go live on 1 October 2022 and Phase 2 on 1 March 2023.
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