Bajaj Finance shares slightly up ahead of Q2 results

Shares of Bajaj Finance were trading 0.4-0.5 per cent up ahead of the NBFC’s Q2 FY24 results. The lender is expected to post an over 30 per cent yoy increase in its net profit for the quarter on the back of a strong disbursement rate.

Estimates for profit after tax were in the range of ₹3,550 crore and ₹3,725 crore, whereas for net interest income (NII) were between ₹7,136 crore and ₹8,398 crore.

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Margins for the lender, however, are seen under pressure owing to the higher cost of funds across the sector. Net interest margin (NIM) is seen declining by about 30 bps on year and 20 bps on quarter, as per analyst estimates.

As per provisional numbers declared, Bajaj Finance disbursed 85 lakh loans during the quarter, up 26 per cent y-o-y leading to a 33 per cent increase in AUM. Deposits were up 39 per cent to ₹54,800 crore.

Overall asset quality for Bajaj Finance is seen steady but a higher rate of loan write-offs and some amount of stress in the rural portfolio could push up credit costs for the NBFC, they said. Credit costs had risen by 170 bps in Q1 FY24 and by 155 bps in Q4 FY23, with Bajaj Finance guiding for overall credit cost for around 155-165 bps for FY24.