Bajaj Finance and Bajaj Finserv preview: Key numbers to watch out for

Sharekhan expects Bajaj Finance NII for Q3 FY21 is expected to be flat at Rs 3612 cr vs 3616 (YoY) and up 6% QoQ. Bajaj Finance Net profit is expected to be down 11% at Rs 1321 cr vs Rs 1488 cr (YoY) and up nearly 37% QoQ. Bajaj Finance is one of the top picks by many Mutual Funds and HNIs in NBFC Space. Some fund managers believe Bajaj Finance should be part of every individual portfolio.

Sharekhan expects Bajaj Finserv revenue to be up 5.5% at Rs 15353 cr in Q3 FY21 vs Q3 FY20 (YoY) and 2% up QoQ while Net profit is expected to be 72% up at Rs 1936 cr vs 1126 cr (YoY) and 20% up QoQ.
For NBFCs, the outlook has improved with moderating borrowing costs, most players also indicate strong mom collection trends, which coupled with high ECL (expected credit loss) coverage provides comfort on balance sheet quality and are encouraging. Signs of demand upcycle in several segments and improving liquidity (reducing drag on margins) will augur well for most strong players.

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The Nifty witnessed a smart recovery on January 19 after declining for the last couple of sessions. It sharply retraced the recent fall, i.e. by more than 61.8%. The index is heading towards the 78.6% retracement mark, which is near 14560. The overall structure indicates that the Nifty can still consolidate further before commencing a larger rally. However the range has shifted higher to 14200-14600, where the index can consolidate over the next few sessions.

Other technical observations On the daily chart, the Nifty is above the 20-day moving average (DMA) and the 40-DEMA, of 14150 and 13748, respectively. The momentum indicator is bearish on the daily chart. On the hourly chart, the Nifty is above the 20-hour moving average (HMA) and the 40-HEMA, i.e. 14416 and 14432, respectively. The hourly momentum indicator is bullish. The market breadth was positive with 1413 advances and 482 declines on the National Stock Exchange.