Bajaj Finance posts strong Q3FY22 performanceBAJFINANCE - 7336 Change: 231.00 (3.25 %)
News: Bajaj Finance reported a stellar performance for Q3Y22 with NII growth of 39.7% YoY to Rs.5998 crore, which beat our estimates. Strong NII growth was driven by healthy expansion in NIMs, lower interest income reversal for the quarter of Rs.241 crore, which also boosted NII. Costs were under control.Thus, sequentially C/I ratio declined to 34.7% from 38.1% QoQ. Provisions declined 19% QoQ and 22% YoY to Rs.1051 crore. The company currently holds management overlay provisions worth Rs.1083 crore. Thus, PAT came in at Rs.2125 crore, up 85% YoY and ahead of our estimates. Asset quality performance was healthy as GNPA and NNPA declined by 72 bps and 32 bps QoQ to 1.73% and 0.78%, respectively. These key ratios are now back to pre-Covid levels. AUM growth also gained traction as it was up 8.6% QoQ and 26.3% YoY to Rs.181250 crore, which was primarily driven by 46% uptick in consumer (sales finance) business and 40% rise in commercial lending.
Views: The Q3FY22 performance was strong across parameters. We believe the company is well on track to achieve its transformational goal. Healthy business traction with potential to improve further bodes well. As a highly profitable fin-tech play we believe valuations will remain premium.