MUMBAI – Bajaj Finance is expected to report a strong double-digit growth in earnings for the quarter ended December, led by healthy loan growth, higher margins, and moderate costs.
The non-bank finance major is seen reporting a 26.3% year-on-year (YoY) growth in net profit for the quarter to Rs 3,756 crore, the average of estimates given by eight brokerage firms showed.
Net interest income for the quarter is expected to grow by a robust 34% YoY to Rs 7,946 crore, the estimates showed.
Led by strong loan growth, Bajaj Finance’s assets under management (AUM) grew by 35% to Rs 3.11 lakh crore as of December end, according to the provisional update shared by the company earlier this month.
New loans booked during the quarter at 9.86 million, was 26% higher than the last year period.
The NBFC major is scheduled to release its third-quarter earnings on Monday. Here’s summarising analysts’ expectations from the company.
Kotak Institutional Equities
Bajaj Finance reported a 7% QoQ loan growth, driving a 35% growth in the AUM. NIM will likely expand 13 bps QoQ, reflecting the benefit of recent capital issuance. NIM would have been flat QoQ otherwise.
We expect the cost-to-average AUM ratio to remain moderate at 4.3% in Q3 FY24 versus 4.3% in Q2 and 4.6% in Q3 a year ago. We pen down credit costs of 1.5% for Q3, similar to the past three quarters.
Axis Securities
AUM growth has remained healthy at 7% QoQ, strong performance continues across operational metrics. Margins are likely to decline by 10-15 bps QoQ owing to an inch-up in CoF, C-I ratio to remain steady.
Credit costs and asset quality are expected to remain stable QoQ. Commentary on the sustenance of growth momentum and scale-up of new products will be eyed.
Motilal Oswal Securities
Bajaj Finance is expected to report AUM growth of 34% YoY/ 7% QoQ. Operating expenses are likely to remain stable with CIR at 34%.
Margins and spreads are likely to decline 25 bps/15 bps QoQ. Credit costs are expected to rise 10 bps QoQ to 1.7%.
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