Bajaj Finance Q2 Results Preview: Net profit, NII likely to grow by one-third amid improving margin

Bajaj Finance is scheduled to report its financial results for the July-September period on Tuesday, October 17. Analysts widely expect the non-banking financial company (NBFC) to register strong earnings growth on the back of a robust increase in advances and steady asset quality.

According to Zee Business research, Bajaj Finance is likely to report a consolidated net profit of Rs 3,604 crore for the second quarter of the current financial year, which translates into a jump of 29.6 per cent compared with the corresponding period a year ago. The analysts estimate the financier's quarterly net interest income (NII)—or the difference between the interest earned and the interest paid—to grow 30.5 per cent on a year-on-year basis to Rs 7,227 crore. 

The company is expected to register growth across segments with an improvement of 30-40 basis points (bps) in the margin compared with the year-ago period. 

Zee Business analysts estimate the company's gross non-performing assets (GNPAs), or gross bad loans, as a percentage of total loans to remain unchanged sequentially at 0.87 per cent for the September quarter. They peg Bajaj Finance's net non-performing assets (NNPAs) at 0.31 per cent, also unchanged from the previous quarter.

In a business update released this month, the NBFC said its deposit book expanded 39 per cent to Rs 54,800 crore and total assets under management (AUM) increased by Rs 20,100 crore, or 33 per cent, to Rs 2.9 lakh crore on a year-on-year basis.     

Here's how Bajaj Finance performed in the June quarter 

Bajaj Finance began the financial year on a good note, with a strong performance for the fiscal first quarter. Its consolidated net profit jumped 30.5 per cent on year to Rs 3,157.8 crore while net interest income grew 30.3 per cent to Rs 6,254.9 crore, according to a regulatory filing. Both PAT and NII exceeded Street estimates.

Zee Business analysts had expected the NBFC's quarterly net profit to be at Rs 3,090 crore and NII at Rs 6,140 crore. The company's asset quality improved, with the gross and net NPAs decreasing by 7-20 bps sequentially to 0.94 per cent and 0.34 per cent, respectively.  

Bajaj Finance shares: Past performance

Bajaj Finance shares finished the July-September period with a gain of 9.1 per cent, outperforming a rise of 2.4 per cent in the headline Nifty index. 

As of October 16, the NBFC stock had grown 10.7 per cent in the past year, underperforming a 14 per cent rise in the blue-chip index. 

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