Bajaj Finance Q1 Preview: PAT likely to rise up to 34% YoY on robust new loan bookings

Bajaj Finance is expected to report up to 34% growth in net profit for the first quarter ended June, according to analyst estimates. The company will announce its first quarter earnings on Wednesday.

The company’s new loans booked during Q1 grew by 34% to 9.94 million as compared to 7.42 million in the corresponding quarter of the previous year.

Assets under management (AUM) grew 32% YoY — the highest-ever quarterly increase — to Rs 2.7 lakh crore.

The customer franchise stood at 72.98 million at the end of June 2023 as compared to 60.30 million as of June 2022 after seeing the highest-ever quarterly increase.

The net interest income for the quarter is seen growing 29% over the previous year period.

In the preceding March quarter, Bajaj Finance posted a consolidated net profit of Rs 3,158 crore for the quarter ended March, 30% higher year-on-year, while net interest income surged 28% to Rs 7,771 crore.

Some of the key monitorables in the earnings card include commentary on the sustenance of growth momentum and progress on the execution of long-range strategy.

Here’s what brokerages expect from Bajaj Finance’s Q1

Kotak Institutional Equities
Bajaj Finance reported 9% quarter-on-quarter loan growth, driving 32% year-on-year growth in AUM. We expect almost flat NIM (up 5 bps QoQ).

We expect cost-to-average AUM ratio to remain high at 4.5%, although down 20 bps from elevated base of 1QFY23. We pen down credit costs of 1.5% for 1QFY24E.

Motilal Oswal
Bajaj Finance reported an AUM growth of 32% YoY. The opex is likely to moderate with CIR improving QoQ to 33%. The margins and spreads are likely to decline 30bp QoQ. Meanwhile, credit costs are expected to decline 10 bp QoQ in 1QFY24.

Axis Securities
The Aum growth has remained healthy at 9% QoQ. Operational metrics progressing well. Margin pressure likely to be seen owing to the inch up in the CoF; C-I Ratio improvement most likely visible.

Credit costs expected to remain flat sequentially; Asset Quality to remain stable

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