19 Jan , 2022 By : Kanchan Joshi
Financial Services company Bajaj Finance reported an 85.5% rise in consolidated net profit at Rs2,125 crore for the third quarter from Rs1,146 crore in the year-ago period. Net Interest Income (NII) rose 40% at Rs6,000 crore as compared to Rs4,296 crore year-on-year (YoY). Its stock surged over 1% to Rs7,857 per share on the BSE in Wednesday's opening deals.
Bajaj Finance delivered an all-round healthy performance in all its key business parameters, as per brokerage Motilal Oswal. It believes that its customer acquisitions and new loans booked have reached pre-covid levels and will soon breach historical highs in subsequent quarters.
“Given the expected strength in asset quality in 2HFY22 and the sustained milestones-driven progress made by it in its digital transformation program, we reiterate our Buy rating with a target price of Rs9,080," said analysts at Motilal Oswal in a note.
In Q3 FY22, Bajaj Finance said it clocked the highest-ever core assets under management (AUM) growth of Rs14,700 crore in a quarter. Its AUM as on 31 December 2021 was up 26% from the year-ago period.
Another brokerage Prabhudas Lilladher also has a Buy rating on Bajaj Finance stock with a target price of Rs8,953 per share post Q3 results as the earnings beat its estimates led by robust NII traction offsetting higher provisioning.
While the digital transformation journey is being closely watched out for, the company plans to transition all consumers to the new digital platform from February onwards.
“We believe that with one of the lowest funding costs in the industry, the company should be able to endure the heightened competition without compromising on pricing/profitability. Plus, further dial down of excess liquidity buffers and normalization of interest reversals would help support margins in the near term," said Nirmal Bang, which has an accumulate rating on Bajaj Finance with price target of Rs7,982.
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