Bajaj Finance shares rose 2 percent at rupees 3,060 gaining 66 percent in the past two trading days on the BSE in an otherwise weak market ahead of January-March quarter earnings today.
Bajaj Finance, sustaining Gross NPA at Q3 levels of 1.55% will be positive. Bajaj Finance’s assets under management growth expected at 35-40%. Bajaj Finance’s net interest margin movement will be good.
The stock was trading close to its record high level of Rupee 3,162, which it achieved on May 3, 2019, in intra-day trade. At 10:30 am, the S&P BSE Sensex was trading flat at 37,109, down nearly 1 percent in the past two trading days.
The loan growth is from 35-40 percent. Last quarter it was at 40.5 percent but this time around one should not be surprised I the loan growth decline.
“Net income growth is expected to be 40 percent in Q4FY19 driven by strong assets under management (AUM) growth. The strong growth AUM is expected to be driven by the rural portfolio. Loan growth is expected to remain strong at 45 percent in Q4FY19. Management has also guided to maintain liquidity cushion in the balance sheet which may slightly affect net interest margin (NIM) in Q4FY19,” the brokerage firm said in result preview.
“In line with seasonal trends, we expect loan growth to moderate to 7 percent quarter on quarter (QoQ) from 10 percent QoQ in Q3FY19. NIM will likely moderate to 11.1 percent, down from 12 percent in Q3FY19, due to a lower share of the high-margin consumer business, in line with seasonal trends,” Kotak Securities said in an earnings preview.