Bajaj Finance Q4FY22 Results Preview: Profit may surge up to 80% YoY, asset quality likely to improve

Financial major Bajaj Finance is likely to report robust earnings in the fourth quarter of the financial year 2021-22 (Q4FY22). Wherein many brokerages expect the non-banking finance company (NBFC) may report up to 80 and 35 per cent year-on-year growth in profit and net interest income (NII), respectively on the back of improved asset quality during the quarter.  

Among all, YES Securities expects Bajaj Finance profit may surge around 80 per cent YoY to Rs 2,423.9 crore, while NII may surge 33 per cent YoY to Rs 6191 crore in Q4FY22.  

“AUM (Asset Under Management) growth at 9 per cent quarter-on-quarter (QoQ) and 29 per cent YoY, including short-term IPO financing receivables. NIM (Net Interest Margin) to fall sequentially on changes in AUM mix but would be higher YoY on lower CoF. Credit cost to be significantly lower on reduction in the delinquent pool and healthy provisions held across buckets,” YES Securities said. 

In line with YES Securities, Nirmal Bang, another brokerage, sees the profit of Bajaj Finance growing 79 per cent YoY to Rs 2,410.7 crore, while its NII may surge over 35 per cent YoY to Rs 6,121.3 crore during the March-end quarter of FY22. 

“We expect strong earnings performance from banks in Q4FY22, driven by improving credit growth stable margins and lower credit costs. Data suggests upturn in credit growth across segments. Within the Retail segment, Housing has continued to show sustained traction while unsecured credit has been improving sequentially,” Nirmal Bang said in a preview report.  

Similarly, Kotak Institutional Equities estimates 67 and 32 per cent YoY growth in profit and NII to Rs 2,255.5 crore and Rs Rs 5054.2 crore, respectively in Q4FY22. “Bajaj Finance has reported 29 per cent loan growth (26% excluding IPO financing) in Q4FY22E. We expect NIM to moderate 20 bps (basis points) QoQ to 10.6%, in line with seasonal trends,” the brokerage said in a preview report.