Bajaj Finance share fell in early trade after the NBFC issued an update about the effect of Covid-19 wave on the financials of the firm. The large cap stock has fallen after five days of consecutive gain. The stock opened with a loss of 3% at Rs 5,813 today against previous close of Rs 5,993 on BSE. The stock touched an intraday low of Rs 5,681.2, down 5.21%.
Market cap of the firm fell to Rs 3.46 lakh crore on BSE.
The stock was the top Sensex loser in trade today. On Nifty too, the stock was the top loser, falling 5.1% to Rs 5682.45 against previous close of Rs 5,993.45.
The share trades higher than 20 day, 50 day, 100 day and 200 day moving averages but lower than 5 day moving averages. The share of NBFC has gained 139.96% in one year and risen 8.42% since the beginning of this year.
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The share hit 52 week high of Rs 6,009 on June 4, 2021 and 52 week low of Rs 2,199 on June 12, 2020. Total 0.97 lakh shares changed hands amounting to turnover of Rs 55.74 crore on BSE.
In its mid quarter update, the firm said B2B and auto finance businesses were most affected due to strict lockdowns in majority of states.
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Most states have indicated continued lockdown till 7 or June 15. With expected reopening, June should be much better. Other lines of businesses were less impacted in April and delivered 85% of planned disbursements. The company leveraged its digital capabilities to remain largely functional during May and delivered 60% of planned disbursements. With expected reopening, June should be much better, it added.
The firm sees an impact of Rs 4,000-Rs 5,000 crore to its assets under management (AUM) growth plan for FY2022 on account of the disruption caused by the second wave.
However, Q1 FY2022 will see higher impact on AUM due to lower volumes in B2B businesses.The company has taken several actions to reduce its operating expenses and cost of funds to partially mitigate the financial impact caused by lower AUM growth, it said.
Brokerage Bernstein said the stock is expected to outperform with a target price of Rs 7,240. It expects the firm to see incremental credit costs of Rs 1,100-1,300 crore in FY22 owing to 2nd Covid wave. This equates to 70-80bps of additional credit cost on top of its 'business-as-usual' annual provisioning (150bps, pre-Covid).
JPMorgan is neutral on the share with a target price of Rs 5,100. Guidance given by the firm is based on resumption of normal activity by July &, though, does not factor in risk of prolonged lockdowns (3rd wave), it said.
Net profit of the company in March quarter climbed 42 per cent to Rs 1,347 crore compared to Rs 948 crore a year ago. Net interest income (NII) for the fourth quarter of FY21 was down half a percent to Rs 4,659 crore as against Rs 4,684 crore in Q4 FY20. New loans booked during Q4 FY21 were 5.47 million as against 6.03 million in Q4 FY20.
In financial year 2020-21, profit fell 16 per cent to Rs 4,420 crore as against Rs 5,264 crore in FY20. Net interest income (NII) rose 2.1 per cent to Rs 17,269 crore against Rs 16,912 crore in FY20.