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Bajaj Finance Q3 Results Review - Focus On Margin Protection Unabated; Growth Runway Strong: Axis Securities

The recent correction in Bajaj Finance’s stock price offers a good entry point for a long-term perspective,

<div class="paragraphs"><p>A person holding Indian two rupees bank notes for photograph. (Photo: Usha Kunji/ Source: BQ Prime)</p></div>
A person holding Indian two rupees bank notes for photograph. (Photo: Usha Kunji/ Source: BQ Prime)

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Axis Securities Report

Bajaj Finance Ltd. reported a strong assets under management growth of 27/6% YoY. The management has indicated that as the contribution of the business-to-business business continues to shrink, the effect of seasonality (as seen historically in Q1 and Q3) will no longer be visible.

Operational metrics remained healthy despite stiff competition with the company adding 3.1 million customers (up 21/19% YoY/QoQ) and booking 7.8 million loans (5/15% YoY/QoQ) during Q3 FY23.

Supported by stable net interest margins and healthy AUM growth, net interest income grew by 25/7% YoY/QoQ.

Even as Bajaj Finance continues to invest in building a franchise, the initial signs of operating leverage emerging are visible from the improvement in the cost-income ratio to 34.7% (down 120 bps QoQ/flat YoY). The management expects opex ratios to improve going into FY24.

Pre-provision operating profit growth remained strong at 24/8% YoY/QoQ.

Credit costs came in within management’s guided range, aiding earnings growth of 40/7% YoY/QoQ. Asset quality remained stable during Q3 FY23.

Click on the attachment to read the full report:

Axis Securities Bajaj Finance Q3FY23 Result Update.pdf

More Research Reports On Bajaj Finance's Q3 FY23 Results Review

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