Bajaj Finserv shares in focus as insurance arm gets Rs 1,010 crore GST notice. Details here

Shares of Bajaj Finserv will be in focus on Wednesday after the company's insurance subsidiary -- Bajaj Allianz -- received a notice from the goods and services tax (GST) department. "Bajaj Allianz General Insurance Company Ltd, an unlisted material subsidiary of the company, has received a Show Cause Cum Demand Notice from the Directorate General of GST Intelligence, Pune Zonal Unit, under Section 73(1) of the Central Goods and Services Tax Act, 2017, on September 29, 2023 alleging a tax demand of around Rs 1,010.06 crore," the company stated in an exchange filing.

The alleged notice pertains to non-payment of GST on the co-insurance premium and re-insurance commission during the period July 2017 to March 2022, Bajaj Finserv mentioned.

"The Show Cause Cum Demand Notice refers to the two matters that are industry wide issues and based on the advice of its tax advisors, Bajaj Allianz will be filing appropriate response to the said Show Cause Cum Demand Notice within the prescribed timelines, the non-banking financial services company (NBFC) further stated.

In a separate development, the Pune-headquartered firm has recently appointed Ramaswamy Subramaniam as President – Private Equity.

On the earnings front, Bajaj Finserv recorded a 48.3 per cent year-on-year (YoY) rise in consolidated net profit for the quarter ended June 2023 (Q1 FY24) to Rs 1,942.63 crore from Rs 1,309.38 crore in the same quarter last year.

Its revenue from operations rose nearly 46.5 per cent YoY to Rs 23,279.98 crore in Q1 FY24 from Rs 15,888.26 crore in the same period a year ago.

The NBFC is scheduled to declare its September quarter (Q2 FY24) earnings later this month (October 27).

On Tuesday, Bajaj Finserv's stock settled with 1.30 per cent gains at Rs 1,560.50 over its previous close of Rs 1,540.45. On a year-to-date (YTD) basis, the scrip has remained almost flat, trading just 0.52 per cent higher. It has slipped 8.29 per cent in the past one year.

The counter traded higher than the 5-day, 10-, 20-, 30-, 50-, 100-, 150- and 200-day simple moving averages (SMAs). The counter's 14-day relative strength index (RSI) came at 56.09. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a price-to-equity (P/E) ratio of 275.27 against a price-to-book (P/B) value of 47.36.

The scrip has an analyst target price of Rs 1,624, Trendlyne data showed, suggesting a potential upside of 4 per cent. It has a one-year beta of 1.17, indicating high volatility on the counter.

At yesterday's closing price of Rs 1,560.50 on BSE, the company's turnover stood at Rs 8.61 crore with a market capitalisation (m-cap) of Rs 2,48,976.03 crore.

(Disclaimer: Business Today provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.)