Bajaj Finance

Bajaj Group’s loan finance arm Bajaj Finance declared good set of Q1FY16 numbers with net interest income rising 19% QoQ to Rs. 969 crore and PAT surging 20% QoQ to Rs. 276 crore, one of the highest quarterly bottomline. Loan losses and provisions also reduced sequentially to Rs. 103 crore, from Rs. 114 crore in Q4FY15. On expanded equity of Rs. 53.45 crore, post QIP and preferential warrants to promoters in June, EPS for first the quarter stood handsome at Rs. 54.34, in relation to FY15’s EPS of Rs. 180.

As company has been infused with capital of Rs. 1,800 crore in June, its capital adequacy ratio (CAR) has strengthened to 20.72%, from 17.97% on 31-3-15. AUM, as of 30-06-15, stood at Rs. 35,557 crore, up 10% QoQ. Asset quality slipped, only marginally, with net NPAs rising to 0.55%, from 0.45% as of 31-3-15.

With BVPS of Rs. 1,011, as of 30-06-15, share is currently ruling at PBV multiple of 5 times, on the highest in the industry, given its stellar and quarter-on-quarter growth. Share has corrected by nearly 10% in the past few weeks, which make a good entry point for quality medium term investment.