Shares of Bajaj Finance Ltd slumped over 6% on Thursday's early trade following non-banking financial company's (NBFC) Q3FY23 business update on Wednesday.
According to brokerage Macquarie, the NBFC's Assets Under Management (AUM) growth has been below expectations, and its quarter-on-quarter (QoQ) growth is the lowest seen over the last 10 years. The brokerage has ‘underperform’ rating for the stock.
As per the NBFC's latest filings, AUM of Bajaj Finance grew 27% on year and 6% QoQ at ₹230,850 crore. During Q3FY23, AUM grew by ₹12,500 crore. Deposits grew 41% on year to ₹43,000 crore.
New loans booked during the quarter witnessed 5% growth at 78 lakh versus 74 lakh in Q3FY22. The customer franchise increased by 31 lakh in Q3FY23 to 6.6 crore vs. 5.5 crore in Q3FY22.
At 10:05 IST, the stock was down over 7% on the BSE.
Global brokerage house, CLSA, in its report said that the NBFC's Q3FY23 AUM growth of 5.7% QoQ was nearly 200 basis points lower than their AUM estimate of 7.5% QoQ.
“Moreover, growth slowed sequentially from Q2 to Q3, which is odd because Q3 is a stronger quarter due to festivals. This means that either there was some festival impact at end-2Q or that the company lost some market share. The number of loans disbursed continued to grow only in single-digits on year versus AUM growth of 27%, which probably implies ticket size-led growth,” added CLSA.
The brokerage reiterates ‘Sell’ rating for the stock with unchanged target price of ₹6,000.
Similarly, global investment banking company, Jefferies believes the NBFC to have witnessed a tad moderation in loan growth and AUM growth. The brokerage has ‘hold’ rating for the stock with a target price of ₹8,160.
“In Q3FY23 results, we will watch-out if this is due to shorter-term securities lending business or retail/ small and medium-sized enterprises (SME) loans. Unit then, softer growth can weigh on stock in near-term,” said Jefferies in its report.
On the other side, international brokerage Morgan Stanley, has ‘overweight’ rating on the stock. According to the brokerage, new customer acquisition has been strong, and the NBFC's well on course to cross its annual target of 10 million.
“QoQ loan growth is a tad softer than the 7-7+% usually seen in F3Q (festive quarter), likely due in part to strong 7% QoQ growth in F2Q and other factors, details of which will follow. Further, we will need to see composition of growth; likely lower growth in mortgages and other secured segments, which are also seeing intense price competition, could help net interest margin,” said Morgan Stanley in its report.
