Bajaj Finance Ltd. is anticipated to announce robust financial results for the first quarter of the fiscal year, with leading brokerages and analysts forecasting a substantial increase in net profit and net interest income (NII). The non-banking financial company (NBFC) previously reported strong asset under management (AUM) growth, fueling positive sentiment ahead of its official earnings release.
Strong Profit and NII Growth Expected
Market observers predict Bajaj Finance's net profit for the June quarter to rise between 20-25% year-on-year (YoY), complemented by a 19-23% YoY increase in NII. This optimism follows the company's earlier disclosure of a 7% sequential and 24% YoY growth in AUM for the same quarter, meeting the upper end of its guidance.
Brokerage Projections Highlight Growth
- BNP Paribas projects Q1 net profit to reach Rs 5,968.40 crore, marking a 25.2% YoY increase. The brokerage also forecasts NII to grow by 23% YoY to Rs 12,579.70 crore, with pre-provision operating profit (PPOP) estimated at Rs 10,299.50 crore, up 21.3% YoY. BNP Paribas suggests that current consensus margin expectations might be conservative.
- YES Securities anticipates an even higher net profit growth of 25.9% YoY, reaching Rs 6,000 crore. Their NII estimate stands at Rs 15,047 crore, a 19.4% YoY rise. They emphasize that strong execution will bolster confidence in the company's full-year outlook.
- Antique Stock Broking expects a 20.3% YoY increase in net profit to Rs 5,733.20 crore, with NII rising 21.5% to Rs 12,420.90 crore. This brokerage recently raised its target price for Bajaj Finance shares to Rs 1,135 from Rs 1,070 in its Q1 preview note.
Bloomberg consensus estimates align with these positive trends, pegging NII at Rs 12,408 crore and net income at Rs 5,791 crore. Provisions for the quarter are estimated at Rs 2,192 crore, with finance costs projected around Rs 7,906 crore.
Analyst Ratings and Share Price Target
Ahead of the earnings announcement, market sentiment towards Bajaj Finance remains largely favorable. According to Bloomberg data, the stock holds 27 'Buy' recommendations, six 'Hold' ratings, and six 'Sell' ratings. The consensus 12-month target price for Bajaj Finance shares is set at Rs 1,083.82, suggesting a modest 2.8% potential upside from current levels.