Bajaj Finance - Q2FY21 Results - Angel Broking

Mr. Jaikishan Parmar, Sr. Equity Research Analyst, Angel Broking Ltd

For Q2FY21, Bajaj finance reported a Subdued set of numbers. AUM grew 1.1% YoY and sequentially remained flat. AUM growth was primarily driven by mortgage book (up 13.6% YoY) and rural portfolio (up 8.3% YoY), while consumer B2B and commercial segment declined 19.3% YoY and 11.4% YoY respectively. Management has toned down its FY21 AUM growth guidance to 6-7% from 9-11% with possible upside risk based on the Q4 business movement. In Q2 Rs.1750cr worth of loan converted into Flexi loan and now Outstanding Flexi loans amount to Rs.43,000cr, which is ~31% of AUM. BAF PAT plunge 36% owing to an elevated level of provision cost. It has increased coverage of stage 1 & Stage 2 assets. Management continue to guide elevated level provisions for FY21 (6000cr - 6300cr) and expecting credit cost of 1.5% - 1.8% in FY22. Bajaj finance currently trades at 4.4x of FY22E Book value, which we believe higher considering low AUM growth and high provision cost. An investor will wait for better clarity on FY22 growth Numbers. Stock price to consolidate till AUM growth evidence and asset quality clarity emerge.

Shares of Bajaj Finance Limited was last trading in BSE at Rs.3233.25 as compared to the previous close of Rs. 3262.1. The total number of shares traded during the day was 237773 in over 21519 trades.

The stock hit an intraday high of Rs. 3295 and intraday low of 3101.6. The net turnover during the day was Rs. 763032000.

Source : Equity Bulls

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