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Q3 preview: Bajaj Finance, Bajaj Finserv likely to post robust profit growth

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Bajaj Finance and Bajaj Finserv are likely to report double-digit growth in key financial numbers for the quarter ended December 2018.

Both the Bajaj Group companies are slated to announce Q3 results on Tuesday.

Shares of Bajaj Finance rose 2.79 per cent to hit a high of Rs 2524.95 on BSE in morning trade on Tuesday.

Meanwhile, shares of Bajaj Finserv nearly 1 per cent to Rs 5956.65. Expectations from Bajaj FinanceBrokerage firm Sharekhan sees a 24.90 per cent year-on-year (YoY) rise in net profit for Bajaj Finance with 13.60 per cent YoY and 29 per cent YoY increase in net interest income and pre-provisioning profit (PPP), respectively. Emkay Global Financial Services, on the other hand, projected 34 per cent and 32 per cent YoY rise in EBITDA and net profit, respectively, for Bajaj Finance.

A strong AUM growth is expected on the back of healthy demand in the consumer segment and mortgage business.

Net interest margins (NIM) are expected to decline marginally on a YoY basis primarily on account of higher cost of funds.

Asset quality is likely to remain stable. Deutsche Bank looks confident on the AUM growth of the NBFC player.

“Bajaj Finance should continue to post steady AUM growth 35 per cent YoY,” the global financial services firm said. Antique Stock Broking sees 23.10 per cent, 31.50 per cent and 28 per cent YoY rise in net interest income, PPP and net income, respectively, for Bajaj Finance for the quarter ended December 2018. The brokerage house expects steady performance from Bajaj Finance with over 30 per cent growth in loan book.

Margins would be impacted slightly but don’t see any meaningful impact on its profitability.

Projections for Bajaj FinservBrokerage firm Motilal Oswal Financial Services sees 30.30 per cent, 37.80 per cent and 42.30 per cent year-on-year rise in net interest income, operating profit and net profit, respectively, for Bajaj Finserv in Q3FY19. Edelweiss Securities believes that strong growth momentum in the financing business would continue.

Margin may come under pressure, a function of change in the business mix.

Life insurance profitability, though improving, will continue to be under pressure.

General insurance would clock better-than-industry growth rate.




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