Q4FY21 Result Update - Bajaj Finserv - ICICI Direct

Bajaj Finserv reported a mixed performance with a gradual pick-up in lending business and robust growth in life insurance while general insurance momentum was slower. Consolidated topline grew 15.7% YoY to Rs. 15387 crore, led by improved traction in insurance business, partially offset by moderation in lending business. Consolidated earnings increased 4x YoY to Rs. 980 crore with improvement in all segments. Consolidated AUM witnessed QoQ growth of 4% YoY to Rs. 152947 crore, led by mortgages. NII remained broadly flat YoY at Rs. 4,659 crore. Lower provision at Rs. 1230 crore led to higher earnings at Rs. 1346 crore, up 42% YoY and 18% QoQ. Asset quality has synced with proforma GNPA, NNPA by Q4 reaching at 1.79%, 0.75% (post ~Rs. 2000 crore i.e. 1.3% write-off in Q4) from proforma GNPA, NNPA of 2.86%, 1.22%, respectively, in Q3FY21.

Valuation & Outlook

Gradual pick-up in AUM in finance business, robust premium accretion in life insurance and growth in general insurance with under writing profit to aid business momentum and earning trajectory. Robust pick-up in life insurance business, selective product mix (pick up in unit linked products) and improvement in VNB margins remains positive. The management focus on selective segment like PV, 2-W, property and retail health bodes well to keep a tab on claim ratio. Recent resurgence in Covid cases remain near term risk. Factoring in revival in business segments, we revise our target price to Rs. 11500/share (earlier Rs. 10500), based on SOTP valuation, implying a multiple of ~26x on FY23E consolidated earnings. However, given recent price run up, we downgrade the stock from BUY to HOLD.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_BajajFinserv_Q4FY21.pdf

Shares of BAJAJ FINSERV LTD. was last trading in BSE at Rs.11030 as compared to the previous close of Rs. 11184.6. The total number of shares traded during the day was 36609 in over 5911 trades.

The stock hit an intraday high of Rs. 11224.8 and intraday low of 10869.7. The net turnover during the day was Rs. 405977038.

Source : Equity Bulls

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