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January 30, 2024

Bajaj Finance disappoints Street, but brokerages stay optimistic.


  • Bajaj Finance reported a 22% YoY growth in consolidated net profit for Q3 FY24, but missed Street estimates.
  • The company faced higher loan losses and provisions during the period.
  • Despite the miss, brokerages remain optimistic about Bajaj Finance’s future performance.

Bajaj Finance, a leading non-banking financial company in India, announced its Q3 FY24 results, reporting a 22% YoY growth in consolidated net profit at Rs 3,639 crore. However, the company missed Street estimates due to higher loan losses and provisions. Despite this, brokerages remain upbeat about Bajaj Finance’s future performance.

The company’s stock has risen over 19% in the last one year, although it has underperformed the benchmark Nifty 50, which has risen 23% during the same period. Bajaj Finance is known for its consumer lending business and has a strong presence in the retail financing sector. It offers a wide range of financial products, including personal loans, home loans, and business loans.

Brokerages believe that Bajaj Finance’s growth prospects are not solely dependent on the current quarter’s performance and that the company is likely to bounce back in the coming quarters. They expect the company to benefit from the recovery in the economy and the overall improvement in the credit environment.

The company’s asset quality remained stable during the quarter, with a gross non-performing assets (NPA) ratio of 2.69% and a net NPA ratio of 1.14%. Bajaj Finance has maintained a strong provisioning coverage ratio, which stood at 82% as of December 31, 2023.

In addition to the consumer lending business, Bajaj Finance has been focusing on expanding its digital lending platform and diversifying its product portfolio. The company has introduced new offerings such as co-branded credit cards and digital savings accounts to cater to the changing needs of its customers.

Bajaj Finance’s performance in the coming quarters will be closely watched by investors and analysts as it is expected to provide insights into the overall health of the consumer lending industry in India. The company’s ability to manage loan losses and provisions, as well as its strategy for growth and diversification, will be key factors in determining its future success.

Overall, while Bajaj Finance may have missed Street estimates for Q3 FY24, brokerages remain optimistic about its long-term prospects. The company’s strong market position, diversified product portfolio, and focus on digital innovation are expected to drive its growth in the coming years.