Should You Buy Bajaj Finance After it Missed Q1 Estimates?

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Should You Buy Bajaj Finance After it Missed Q1 Estimates?
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By Aditya Raghunath -- For the quarter ended June 30, 2021, Bajaj Finance Ltd (NS: BJFN ) reported a total income of Rs 6,743.01 crore, down -1.63 % from Q4 FY21’s Rs 6,854.94 crore, and up 1.40 % from Rs 6,649.74 crore it posted in the corresponding period last fiscal. It reported a net profit of Rs 1,002.44 crore for the June 2021 quarter. These numbers are well below analyst estimates.

Brokerages are divided over the company’s prospects. Motilal Oswal Financial Services Ltd (NS: MOFS ) is bullish on the stock and has a buy recommendation with a target price of Rs 6,750 on the stock. That’s a potential upside of 13.5% from its July 20 closing price of Rs 5,941.85. The brokerage said, “Despite the transitory deterioration in asset quality and resultant high credit costs, 1QFY22 was a decent quarter for BAF. Customer acquisitions and new loans booked were healthy even in a pandemic-disrupted quarter.”

Nomura has downgraded the stock to a ‘hold’ rating with a reduced target price of Rs 6,390 from its earlier Rs 6,500. It said that the upside for Bajaj Finance in the near term will be limited. HDFC (NS: HDFC ) Securities has a ‘reduce’ rating on the stock. Its target price for the stock has been revied to Rs 4,590 from Rs 4,798 earlier.

Bernstein, however, has retained its ‘outperform’ rating with a target of Rs 7,240 for Bajaj Finance.

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    yes we will buy this
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