Bajaj Finance stock hits record high post Q3 earnings: Should you buy, sell or hold?

Bajaj Finance share climbed 3.82 percent today after the non-banking finance company reported a 85% rise in consolidated net profit for the quarter ended December 2021. The stock touched a record high of Rs 8,043.50, rising 3.82% on BSE. Bajaj Finance stock is trading higher than 5 day, 20 day, 50 day, 100 day and 200 day moving averages.

The large cap stock has gained 58.68% in one year and risen 12.83% since the beginning of this year. The share has gained 14.05% in a month. Total 0.23 lakh shares of the firm changed hands amounting to a  turnover of Rs 18.46 crore on BSE.

Market cap of the NBFC rose to Rs 4.79 lakh crore. The share hit 52 week low of Rs 4,361 on April 19,2021.

The firm reported a net profit of Rs 2,125.29 crore for the quarter ended 31 December, 2021 against net profit of Rs 1145.98 crore in the year-ago period.

Net interest income (NII) rose 40% to Rs 6,000 crore in Q3 against Rs 4,296 crore in the corresponding period of last fiscal. Interest income reversal for the quarter was Rs 241 crore as compared to Rs 450 crore in Q3FY21.

Assets under management (AUM) climbed 26% to Rs 181,250 crore in Q3 from Rs 143,550 crore as of 31 December 2020. The company also posted the highest ever quarterly core AUM growth of Rs 14,700 crore in the last quarter.

Asset quality of the firm improved with Gross NPAs and Net NPAs falling to 1.73% and 0.78% in Q3 against 2.45% and 1.10% as of 31 September 2021. The company has provisioning coverage ratio of 56% on stage 3 assets and 156 bps on stage 1 and 2 assets as of Q3FY22.

Motilal Oswal has given a buy call to the stock. The financial services firm said, "The firm delivered an all-round healthy performance in all its key business parameters.

We expect the firm to deliver a RoA/RoE of 4.3-4.6%/21-23% over FY23- 24E. Given the expected strength in asset quality in 2HFY22 and the sustained milestones-driven progress made by it in its digital transformation program, we reiterate our Buy rating with a target price of Rs 9,080 (8.5x FY24E BVPS)."

Bajaj Finance reported a 53 per cent rise in consolidated net profit at Rs 1,481 crore for the quarter ended September on healthy interest income. The non-banking finance company had reported a net profit of Rs 965 crore in the same quarter of the previous fiscal. Total income rose 19 per cent to Rs 7,732 crore in Q2 against Rs 6,520 crore in the corresponding quarter of FY21.