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Business News/ Markets / Stock Markets/  Why Bajaj Finance shares today tanked 500 in a single day
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Why Bajaj Finance shares today tanked ₹500 in a single day

Motilal Oswal said AUM growth of the Bajaj Finance was lower than expectations

Bajaj Finance shares fell 8% at intraday lowsPremium
Bajaj Finance shares fell 8% at intraday lows

Shares of Bajaj Finance today tanked 8% or nearly 550 after the company's asset under management numbers for the quarter ended December 31 came in below market expectations. Sharing its business update to exchanges, Bajaj Finance said that its assets under management (AUM) grew by 27% year on year to approximately 230,850 crore as of 31 December 2022 as compared to 181,250 crore as of 31 December 2021. AUM in Q3 FY23 grew by approximately 12,500 crore. On a sequential basis (quarter on quarter), it was up 6%.

The performance was slightly lower than Street expectations as third is usually a strong quarter led by festive demand, say analysts.

New customer acquisition, though highest for the quarter at 3.1 million, was slower than expected, Antique analysts said, adding that new loans booked indicated that contribution of existing customers remains significant.

"Company continues to grow strong through its existing customers, but we believe this cannot continue for long and growth can see slight moderation in the medium term."

Motilal Oswal said AUM growth of the Bajaj Finance was lower than expectations though growth suggested that disbursements were strong across product segments.

Further, capital adequacy ratio or CRAR was flat QoQ at 25.1%, suggesting weaker growth and lower utilization of capital, Motilal Oswal said.

According to the quarterly update, Bajaj Finance acquired 3.1million new customers in Q3 vs 2.6 million in 2QFY23). The new customer acquisition run-rate, according to Motilal Oswal, was healthy in the December quarter.

In a note, Jefferies said that Bajaj Finance's 3QFY23 pre-quarter update shows some moderation in AUM growth to 27% YoY/ 6% QoQ from 31%/7% in 2Q. Growth in new loan booking was also slower at 5% YoY; QoQ growth of 15% is due to favourable seasonality (festive-period), the brokerage added.

In 3Q results, Jefferies added, "we will watch out if this is due to shorter-term securities lending business or retail/ SME loans. Until then, softer growth can weigh on stock in near-term.

Deposit book stood at 43000 crore, up 41% YoY and 9% QoQ. “Robust deposit growth suggested that BAF continued to prioritize deposit growth," Motilal Oswal said. 

Jefferies has a hold rating on the stock while Motilal Oswal a buy. At 9:40 am, Bajaj Finance shares were trading 5% lower at 6,269 per share. (With Agency Inputs)

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Published: 05 Jan 2023, 09:41 AM IST
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