A director at Bajaj Finance Ltd sold 6,700 shares at 9,090.860INR and the significance rating of the trade was 82/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two years cle...
BAJAJ FINANCE: Earnings in line; digital transformation aiding momentum (BAF IN, Mkt Cap USD54.4b, CMP INR7429, TP INR8310, 12% Upside, Buy) PAT grew 88% YoY to ~INR27.8b (in line) in 2QFY23. This healthy operational performance was driven by robust customer additions, new loan acquisitions, and strong velocity, aided by its omnichannel strategy and the digital ecosystem. NII grew 29% YoY to INR55.4b. Other operating income grew 31% YoY, driven by a healthy improvement in fee income and hig...
Bajaj Finance (BAF)'s 1QFY23 PAT grew 160% YoY/7% QoQ to ~INR26b (17% beat). The company posted a healthy operational performance driven by robust customer additions, new loan acquisitions and strong velocity aided by its omni-channel strategy and digital ecosystem. NIM (calculated) expanded ~40bp QoQ to 13.2% supported by a ~15bp QoQ decline in the cost of borrowings. We, however, estimate NIM to contract ~40bp YoY in FY23 due to BAF's limited ability to pass on the increase in borrowing cos...
BAJAJ FINANCE: BAJFIN and the entire Financial Services group set to benefit from the new AMC license in the parent entity (BAF IN, Mkt Cap USD56.4b, CMP INR6943, TP INR7700, 11% Upside, Buy) Bajaj Finserv has got an in-principle approval from SEBI for sponsoring a Mutual Fund (MF). While the opportunity is huge, given the under penetration and financialization of savings in the country, the competitive intensity in the industry is high with 44 players. Bajaj Finserv has inherent advanta...
BAJAJ FINANCE (IN), a company active in the Speciality Finance industry, has received a double requalification by the independent financial analyst theScreener. Its fundamental valuation is now 3 out of 4 stars while its market behaviour can be considered as defensive. theScreener believes that the gain of a star(s) and an improvement in the market risk perception allows upgrading the general evaluation to Slightly Positive. As of the analysis date August 20, 2021, the closing price was INR 6,66...
Full Article at IIR has reaffirmed its Recommended rating for PIA after undertaking a review post the appointment of a new Portfolio Manager, Harding Loevner. The full report can be found on the IIR website. On 26 July 2021, Pengana International Equities Limited (PIA) announced a fully franked dividend of 1.35 cents per share for the June quarter. This represents an 8% increase on the March quarter dividend and takes the total dividends declared for FY21 of 5.1 cents per share, fully franked....
(BAF IN, Mkt Cap USD48b, CMP INR5938, TP INR6750, 14% Upside, Buy) Bajaj Finance (BAF)’s 1QFY22 PAT was up 4% YoY / down 26% QoQ to ~INR10b (27% miss). While NII at INR37b (5% miss) was up 12% YoY, opex was largely in-line. Provisions came in at INR17.5b v/s our estimate of INR15b. The company aggressively wrote off ~INR9.2b worth of loans and kept COVID overlay provisions at INR4.8b, leading to high provisions. The GNPL ratio increased from 1.8% to 2.96% QoQ. BAF wrote off ~INR9.2b (60bp...
EM Outperforming; Favor EM over EAFE With many global markets crumbling last week, one might assume that EM would have underperformed -- but that is not what transpired. What we saw was a decline in the US dollar which, along with improving coronavirus metrics in China, led to EM outperformance. Reiterating our 12/20/19 EM Strategy, we continue to believe EM is a better place to be than EAFE, supported by new highs in the EM vs. EAFE ratio and our ongoing belief that the US dollar is likely not...
Growth Over Value We continue to see coronavirus concerns as helping correct the excess bullish sentiment in the short-term. Additionally, considering the dearth of breakdowns, we continue to believe this is a bull market until proven otherwise and a “buy the dip†strategy remains warranted. • Major Indexes Holding Up Well. As mentioned above, breakdowns in major indexes are hard to come by. EM (MSCI EM), China (MSCI China), Europe (STOXX 600), MSCI ACWI, ACWI ex-US, and EAFE have all pu...
Bajaj Finance: Strong performance amidst tough macros (BAF IN, Mkt Cap USD37.3b, CMP INR4422, TP INR4850, 10% Upside, Neutral) BAF’s PAT increased 52% YoY to INR16.1b (in-line) in 3QFY20. Better-than-expected margin performance led to PPoP (+44% YoY) beat of 5%. Higher-than-expected provisions led to in-line PAT (+52% YoY). Other highlights: (a) AUM increased 35% YoY, helped by Auto finance (+51% YoY) and Mortgages (+44% YoY). (b) Spreads improved 50bp YoY. (c) GS3 % was flat QoQ at ~1.6...
BAJAJ FINANCE: Strong performance, fee traction robust (BAF IN, Mkt Cap USD32.9b, CMP INR4031, TP INR3850, 5% Downside, Neutral) Bajaj Finance's (BAF) PBT grew 41% YoY in 2QFY20, while PAT increased 63% YoY to INR15b owing to the lower tax rate. The quarter was characterized by continued strong AUM growth and stable margins/asset quality. AUM increased 38% YoY to INR1.4t, led by strong growth across segments, barring commercial lending. BAF continues being cautious on digital products,...
BAJAJ FINANCE (Annual Report Update): Profitability improving; High fee income, low expense ratio – key drivers of RoA improvement (BAF IN, Mkt Cap USD26.1b, CMP INR3260, TP INR3550, 9% Upside, Neutral) Bajaj Finance's (BAF) AUM growth has been driven largely by volumes. Growth in its customer base accelerated to 32% YoY in FY19 from 28% over the prior two years. At the same time, the number of new loans disbursed increased at a consistent pace of ~50% YoY in the year, in line with past t...
More cracks begin to show Weaker than expected data out of China and an as-expected 0.1% preliminary GDP contraction for the 2nd quarter in Germany has global equities back on the defensive, with the MSCI ACWI, ACWI ex-US, and EAFE back near logical support. In last week's Int'l Compass we noted that some cracks are beginning to show in the form of STOXX 600 Banks and Brent crude breakdowns, which led us to believe global equities are vulnerable to a breakdown. Below we highlight more cracks th...
Bajaj Finance: Strong quarter, but watchful in certain products (BAF IN, Mkt Cap USD27.5b, CMP INR3266, TP INR3550, 9% Upside, Neutral) PAT grew 43% YoY to INR12.0b (in-line) in 1QFY20. The quarter was characterized by continued strong AUM growth and stable margins/asset quality. AUM increased 41% YoY to INR1.3t, led by strong growth across segments, barring commercial lending. Adjusted for the IPO funding book, AUM growth was at 38% YoY. AUM growth in consumer B2B financing was robus...
Bajaj Finance: Robust AUM growth, stable asset quality (BAF IN, Mkt Cap USD25.7b, CMP INR3112, TP INR2900, 7% Downside, Neutral) PAT of INR11.6b exceeded our estimate by 11%, led by a modest NII beat and lower credit costs. The quarter was characterized by continued strong AUM growth, stable sequential margins and healthy asset quality. AUM increased 5% QoQ (+41% YoY) to INR1.16t, led by strong growth across segments, barring commercial lending (+10% YoY). In 2W lending, BAF financed 44...
The MSCI EM index continues to develop positively from a price perspective and we expect higher prices ahead. RS for the MSCI EM index is consolidating when compared to the MSCI EAFE index, which we believe is largely due to consolidation in the U.S. dollar. Therefore, the direction of the dollar will be critical for EM equities. A breakout in the USD may begin to create problems for EM, whereas a failure to break above 97.70-98 resistance and a gradual weakening of the USD should be an environm...
Bajaj Finance: Strong growth despite liquidity crunch (BAF IN, Mkt Cap USD20.4b, CMP INR2516, TP INR2400, 5% Downside, Neutral) Bajaj Finance (BAF) reported 3QFY19 PAT at INR10.6b (8% beat), a growth of 54% YoY, despite tough liquidity situation and higher-than-expected credit cost of INR4.5b (of which INR2.85b was a write-off). In line with previous quarters, AUM was on growth trajectory rising 41%/10% YoY/QoQ to INR1.1t. Consumer finance/SME finance grew smartly by 40%/37% on a YoY bas...
BAJAJ FINANCE: Hitting the pedal on asset-light profitability; Key vectors – rural, cross-sell and retailization of liabilities (BAF IN, Mkt Cap USD20.7b, CMP INR2541, TP INR2375, 7% Downside, Neutral) We are optimistic on Bajaj Finance’s (BAF) outlook, given its traction in multiple products, new initiatives in various business segments (on both the asset and liability sides) and able top management. We are particularly enthused about the new emerging vectors of profitability: (a) asset...
Bajaj Finance | Annual Report Update: Superior execution; New products showing healthy traction (baf IN, Mkt Cap USD20.4b, CMP INR2570, TP INR2400, 7% Downside, Neutral) Superior execution across products, focus to increase new growth/profit avenues (rural lending, housing finance companies (HFCs), cross-selling, etc.) and strong focus on asset quality are the key highlights of the FY18 Annual Report (AR). With the strong treasury management (move towards capital market linked borrowings/de...
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