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Research
Q4FY21 Result Update - Bajaj Finance - ICICI Direct
Posted On : 2021-04-28 10:10:44( TIMEZONE : IST )
Bajaj Finance posted a steady set of numbers on the business and operational front with QoQ improvement in AUM, profitability being boosted by lower provisions. With high frequency risk, collections not warranting risk stance change guidance remains the same. Hence, it is a welcome sign. During the quarter, AUM growth on a sequential basis was at a multi quarter high of 6.5% at Rs. 152947 crore led by 6.1% QoQ rise in mortgage book, while SME, consumer B2C and securities lending also showed respectable growth. The company during the quarter acquired 22.6 lakh new customers vs. 21.9 lakh QoQ and total customer franchisee for the quarter was at 4.8 crore representing growth of 14% YoY. The quarterly new customer addition was within their general guidance of 70-80 lakh new customer acquisition in a year.
Valuation & Outlook
Bajaj Finance has sailed through the headwinds and emerged stronger with a leaner operating model and robust growth guidance. The management not changing the stance and expecting the current loss in Q1 due to the second wave to be largely covered in the next three quarters remains a positive scenario for the stock. We expect 20%, 22% growth for FY22E, FY23E and PAT growth of 40%, 31% (marginal revised upwards by 6%), respectively. RoE is seen returning to ~15-16% and RoA at >3%. Possibility of application for banking license is also an added positive. We believe premium multiples will be maintained for Bajaj Finance and accordingly value the stock at 6.7x FY23E. We maintain target price of Rs. 5900. We maintain BUY rating.
For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_BajajFinance_Q4FY21.pdf
Shares of Bajaj Finance Limited was last trading in BSE at Rs.4873.45 as compared to the previous close of Rs. 4730.6. The total number of shares traded during the day was 95411 in over 8165 trades.
The stock hit an intraday high of Rs. 4931.35 and intraday low of 4747. The net turnover during the day was Rs. 459159212.
