Bajaj Finance Ltd. - Q3 FY23 Earning Highlights | Globe Capital Market LTD.
Bajaj Finance Ltd. – Q3 FY23 Earning Highlights

Good quarter across all financial and portfolio metrics albeit marginally lower AUM growth.

Q3 FY23 Earning Overview and Verdict
Rs. 6030
Beats the market estimates

Earning Highlights Q3FY23:

  • Bajaj Finance reports highest ever consolidated quarterly profit after tax of Rs. 2,973 crore in 03 FY23, a growth of 40% over 03 FY22.
  • Net interest income (NII) for 03 FY23 increased by 24% to Rs. 7,435 crore from Rs. 6,005 crore in 03 FY22. NII growth was 28% after adjusting NII of Rs. 203 crore earned on IPO financing in Q3 FY22 which has since been discontinued due to change in regulation.
  • Gross NPA and Net NPA as of 31 December 2022 stood at 1.14% and 0.41% respectively, as against 1.73% and 0.78% as of 31 December2021. The Company has provisioning coverage ratio of 64% on stage 3 assets and 116 bps on stage 1 and 2 assets as of 31 December 2022.
  • Loan losses and provisions for Q3 FY23 was Rs. 841 crore as against Rs. 1,051 crore in Q3 FY22. The Company holds a management and macro-economic overlay of Rs. 1,000 crore as of 31 December 2022.
  • Customer franchise stood at 66.05 million as of 31 December 2022 as compared to 55.36 million as of 31 December 2021, a growth of 19%. The Company recorded highest ever quarterly increase in its customer franchise of 3.14 million in 03 FY23.
  • New loans booked during 03 FY23 were highest ever at 7.84 million.
  • Assets under management (AUM) grew by 27% to Rs. 2,30,842 crore as of 31 December 2022 from Rs. 1,81,250 crore as of 31 December 2021.
  • During the quarter, the Company acquired 41.5% stake (on fully diluted basis) in Snapwork Technologies Private Limited for~ 92.74 crore with an intention to strengthen its technology roadmap.
  • Annualized return on average assets for 03 FY23 was 5.4% as against 5.1% in 03 FY22.
  • Annualized return on average equity for 03 FY23 was 24.0% as against 21.2% in 03 FY22.

Management Takeaways: Good quarter across all financial and portfolio metrics albeit marginally lower AUM growth. On track to deliver ₹ 52-53K crore of core AUM growth in FY23. Q3 witnessed highest ever loans booked and new customer addition. Crossed 31 MM net users on the App. Phase 2 of Consumer App has started to go live. On track to go fully digital across all products and services by March 2023.

Valuation & View:

At the CMP of Rs. 6030, the stock is trading at ttm P/BV multiple of 7.5 times with the ttm Book Value of Rs. 794.


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