Bajaj Finance Q1 results: Key expectations, share price target ahead of earnings

Bajaj Finance Ltd is expected to report a 20-25 per cent year-on-year (YoY) rise in net profit for the June quarter on 19-23 per cent YoY rise in net interest income (NII). The NBFC had reported a strong asset under management (AUM) growth of 7 per cent sequentially and 24 per cent YoY for the June quarter earlier, at the upper end of its guidance. Analysts are optimistic.

BNP Paribas said Q1 earnings season appears unlikely to carry major surprises – one way or another – for the bulk of NBFCs. But its  "material positive surprise expectations" in BAF stem from what it sees as somewhat conservative margin expectations built into the Bloomberg consensus.

For the quarter, BNP Paribas sees Q1 net profit coming in at Rs 5,968.40 crore up 25.2 per cent YoY. It sees NII growing 23 per cent YoY to Rs 12,579.70 crore. Pre-provision operating profit (PPOP) is seen at Rs 10,299.50 crore, up 21.3 per cent YoY.

A strong growth execution from Bajaj Finance would augment confidence in its growth outlook and guidance for the year, YES Securities said as it sees Q1 net profit for Bajaj Finance growing 25.9 per cent YoY to Rs 6,000 crore on 19.4 per cent YoY rise in NII at Rs 15,047 crore.

Antique Stock Broking expects Bajaj Finance Ltd to report 20.3 per cent YoY rise in net profit at Rs 5,733.20 crore in the June quarter on 21.5 per cent jump in NII at Rs 12,420.90 crore. This brokerage upped its target price on Bajaj Finance to Rs 1,135 from Rs 1,070 in its Q1 preview note.

As far as Bloomberg consensus estimates go, NII for the NBFC is pegged at Rs 12,408 crore, net income at Rs 5,791 crore. Provisions for the quarter are seen at Rs 2,192 crore while finance cost is estimated at Rs 7,906 crore.

Ahead of the quarterly earnings, the stock has 27 'Buy' calls, six 'Hold' recommendations and six 'Sell' ratings, Bloomberg data showed. The consensus 12-month target price for the stock at Rs 1,083.82 suggests 2.8 per cent potential upside for the stock.