Bajaj Finance shares fall by over 2% as Q1 results fail to impress. Should you invest?
Bajaj Finance fell by 2.5% in early trade on Wednesday to a low of Rs 6,560 after the company reported a 14% year-on-year (YoY) jump in its net profit, which was slightly below the street’s estimates of Rs 3,947 crore.
The net interest income (NII) for the reporting quarter advanced 25% YoY to Rs 8,365 crore from Rs 6,717 crore in the same quarter of last year. Company’s gross NPA (non-performing asset) and net NPA ratios stood at 0.86% and 0.38%, respectively at the end of the June quarter. The same was 0.87% and 0.31% at the end of last year's quarter.
The loan losses and provisions for the April-June 2024 period increased to Rs 1,685 crore against Rs 995 crore in the corresponding period of the previous year.
Here is how brokerages viewed the first quarter results:
Bernstein: Market perform | Target price: Rs 6,800
Bernstein has maintained a market perform rating on Bajaj Finance with a target price of Rs 6,800.
A massive credit cost increase presents a grim picture and a sequential rise in the non- interest income was the only saving grace. The RoA could have fallen even lower and RoE is moving closer to mid-teens.
Nomura: Neutral | Target price: Rs 7,200
Nomura has maintained a neutral rating on the stock and cut the target price to Rs 7,200 from an earlier Rs 7,500.
Nomura said that its FY25F/26F EPS is largely unchanged, and it expects AUM and EPS CAGRs of 27% and 21% respectively over FY24-26F and an average RoE of 21% over FY25-26F.
Emkay Global: Buy | Target price: Rs 9,000
Emkay has maintained
