Q3 Results Preview: Bajaj Finance net profit to grow 41% YoY despite erosion in margins
According to research by Zee Business, Bajaj Finance is expected to report a 41% increase in consolidated net profit to Rs 3,000 billion in the quarter ended December 31, 2022. In the same period last year, the services company non-banking finance (NBFC) reported a profit after tax (PAT) of Rs 2,125.3 crore.
PAT or net profit refers to income after income tax is accounted for. It is the company’s ability to generate profits.
Bajaj Finance will report earnings for the October-December 2023 fiscal quarter on Friday, January 27, 2023.
Net interest income (NII) or the difference between interest earned and interest paid could increase by 25.4% in the reported quarter to Rs 5,930 crore from Rs 4,727.7 in the first quarter of a year ago.
Quarterly margins and spreads (QoQ) are expected to decline. Similarly, Bajaj Financial’s credit costs may also ease slightly, while asset quality may ease on improving debt collection in the third quarter.
According to Axis Securities, AUM growth and operating parameters are said to have increased 27% year-on-year, however, comment on future growth will be closely watched.
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The brokerage firm expects margin pressure amid rising capital costs and expense-to-earnings ratios, which are expected to range from 35-36%.
Axis Securities also noted that Bajaj Finance’s credit cost will not change sequentially in its preview comment.
3rd quarter update:
In its Q3 update, Bajaj Finance said that the company’s assets under management increased 27% year-on-year to around 2.31 lakh crore from 1.8 lakh crore on 31st May. December 2022. It reported its highest loan book ever in Q3FY23 to 7.8 MM from 7.4 MM YoY.
Also read: Bajaj Finance’s share price rises 7% as Street disagrees with poor business update
Bajaj Finance’s deposit book grew 41% to Rs 43,000 crore from Rs 30,481 crore on December 31, 2022, the company said in its Q3 update. Net liquidity is at Rs 12,750 crore and Capital Adequacy Ratio (CRAR) is at 25.1% as of December 31, 2022.
Shares of Bajaj Finance on Wednesday fell 1% to Rs 5796.9 per share on BSE
