Shares of Bajaj Finance rose over three percent on Wednesday after the company posted a strong business update on Tuesday night. At 10:59 am, the stock was up 3.1 percent at Rs 7,566.45 on BSE and was the top gainer on Nifty50. The stock has been gaining for the last four days and has risen over 9 percent during the period.
Bajaj Finance’s deposit book stood at approximately Rs 30,000 crore as of December 31, 2021, as compared to Rs 23,777 crore as of December 31, 2020. Deposit book in Q3 FY22 grew by approximately Rs 1,250 crore.
The company has not witnessed any adverse impact on its NPA position due to the transition to the new method of NPA recognition, the non-bank lender added.
The company’s customer franchise increased by 2.6 MM in Q3 FY22 as compared to 2.2 MM in Q3 FY21, while new loans booked during Q3 FY22 were 7.4 MM as compared to 6.0 MM in Q3 FY21.
Bajaj Finance’s assets under management stood at approximately Rs 181,300 crore as of December 31, 2021, as compared to Rs 143,550 crore as of December 31, 2020.
The non-bank lender’s liquidity position remains strong and it continues to remain well capitalised with the capital adequacy ratio of approximately 27.0 percent as of December 31, 2021.
With stronger-than-expected loan growth in Q3 and likely strong asset quality, Morgan Stanley has maintained its ‘overweight’ rating on Bajaj Finance shares. The brokerage house pointed out that new customer acquisition was the highest ever in a quarter.
CLSA pointed out that Q3 was one of the strongest since COVID in terms of growth, and new customer acquisition inched higher sequentially due to festival season. However, CLSA has maintained its ‘sell’ rating on the stock with a target price of Rs 6,000.
Meanwhile, ICICI Direct Research said, “We believe a spur in loans, customer addition and no adverse impact of transition on asset quality will be beneficial for the company and reflect in Q3FY22 earnings as well”.
“Bajaj Finance I would put in a different block compared to regular NBFCs because I think they have a major focus now on service businesses as well in Bajaj Finance. It’s not a pure lending institution, plus it has got pedigree, it’s got capital, it’s got everything going for it, except that they doesn’t have a banking license. I think that’s the bottom line. So I think Bajaj finance, you put it in a separate block, and if you want to buy NBFCs, you must start with Bajaj Finance, there is no other way to start it. Now leave aside Bajaj Finance, which is next NBFC you want to buy in this market? Zero, absolutely zero,” said Ajay Srivastava, CEO, Dimensions Corporate Finance Services.
“Therefore, big banks will still remain the favourite of RBI, NBFC barring Bajaj Finance, I can’t even find the next one to buy into maybe Piramal when it splits, it comes out, it will become a good buy but there is no other second NBFC you would like to buy in this market,” added Srivastava.