The shares of Bajaj Finance Limited opened at Rs 6,490 and tumbled by more than 7 percent to reach an intra-day low of Rs 6,025.05. The shares tanked despite the company marking the highest loans booked in a quarter at 7.8 MM compared to 7.4 MM in Q3 FY22.
The company’s assets under management grew by 27 percent Year on Year (YoY) to Rs 181,250 crore as of 31 December 2021, which remained below the market expectation as the third quarter of a year is generally considered to be a strong quarter due to festive demand.
The Company continues to remain well capitalized with a capital adequacy ratio (CRAR) of approximately 25.1% as of 31 December 2022. The Deposit book stood at approximately Rs 43,000 crore as of 31 December 2022 as compared to Rs 30,481 crore as of 31 December 2021, which is a YoY growth of 41%.
Bajaj Finance Limited is the lending arm of Bajaj Finserv Limited. It is one of the most diversified Deposit taking Non-Banking Financial Companies (NBFC) with a lending portfolio across retail, SME, and commercial customers with a significant presence in urban and rural India.
Here’s what analysts have to say about the performance of the company:
Domestic brokerage firm Motilal Oswal Financial Services also noted that AUM growth was below expectations. “Capital adequacy ratio (CRAR) was flat on a quarterly basis at 25.1%, suggesting weaker growth and lower utilization of capital,” it said. The firm has a Buy rating on the stock.
Further, global brokerage Jefferies has a ‘Hold’ rating on the stock with a target of Rs 8,160 per share. We will watch out if the growth moderation was due to shorter-term securities lending business or retail/ SME loans. Until then, softer growth can weigh on the stock in the near term, the brokerage firm said.
Written by Anoushka Roy
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