Bajaj Finance Stock Slip Despite Strong Q2 Numbers

Bajaj Finance recorded a 53 percent increase in total net profit to 1,481 crore in the quarter ended September 2021, despite the fact that it fell short of market expectations. The non-banking finance company claimed total income increased by 19% to Rs 7,732 crore in the July-September period of 2021-22, compared to Rs 6,520 crore in the same quarter of FY21.

"Net Interest Income for Q2FY22 increased by 28% to Rs 5,335 crore as against Rs 4, 162 crores in Q2FY21. Interest income reversal for the quarter was Rs 322 crore as compared to Rs 216 crore in Q2 FY21," the company said. "In absence of a third wave, the company expects quarterly interest reversals to normalize to Rs 180-200 crore by Q3FY22," Rajeev Jain, managing director, Bajaj Finance, said.

Bajaj Finance shares were down 1.3 percent to 7741. The stock, on the other hand, is up around 45 percent year to date, surpassing the broader markets. Today, investors took profits in the stock, which appears to have already discounted brokerages' upbeat outlook for Q2 earnings. In the last year, the stock has increased by more than 131 percent.

On a sequential basis, gross non-performing assets (NPAs) and net non-performing assets (NPAs) were 2.45 percent and 1.10 percent, respectively, at the end of September 2021, compared to 2.96 percent and 1.46 percent in June 2021. 216 additional locations were added to the company's footprint during the quarter.

There were 3,329 locations and 1,19,900 distribution points in the total geographic footprint. In order to support its expansion, the company hired 2,000 new employees.

The corporation is in the process of updating its consumer app. The app currently has 12.9 million users. According to Jain, this is part of the company's omnichannel strategy, which allows customers to smoothly transition from online to physical and vice versa.

Since June 29, 2001, Bajaj Finance Ltd. has declared 22 dividends. Bajaj Finance Ltd. has issued an equity dividend of Rs 10.00 per share in the last 12 months. This translates to a dividend yield of 0.13 percent at the current share price of Rs 7564.35.

The stock returned 235.87 percent over three years, compared to 78.7 percent for the Nifty 100. Over a three-year period, the stock achieved a 235.87 percent return, compared to 90.64 percent for Nifty Financial Services.