Consumer Analyst / Channel Surveillance Specialist, Trudence Capital Advisors

Pranav Bhavsar

Consumer Analyst / Channel Surveillance Specialist

Trudence Capital Advisors

Trudence Capital Advisors Private Limited is a SEBI-registered Research Analyst, holding SEBI registration number INH000015747. Our firm is dedicated to providing independent and unbiased research on Indian mid to large-cap companies. Trudence Capital is known for its counter-consensus views, with a focus on forensic research and on-ground primary investigations. Our research approach is thorough, involving detailed analysis of accounting practices and governance, alongside extensive channel checks.

Independent & Unbiased Research

Equity Bottom-Up

<ul>
<li>India's Credit Landscape has changed and is facing structural and regulatory challenges.</li>
<li>The Indian regulator (RBI), particularly in its oversight of underwriting practices and the behavior of Non-Banking Financial Companies (NBFCs), is commendably proactive, positioning it ahead of the curve.</li>
<li>We expect more such steps in other parts of the credit funnel. The recent crack down along with the stock underperformance is here to stay and possibility intensify. </li>
</ul>


India's Credit Landscape has changed and is facing structural and regulatory challenges.
The Indian regulator (RBI), particularly in its oversight of underwriting practices and the behavior of Non-Banking Financial Companies (NBFCs), is commendably proactive, positioning it ahead of the curve.
We expect more such steps in other parts of the credit funnel. The recent crack down along with the stock underperformance is here to stay and possibility intensify. 


Trouble in Paradise | India Credit Landscape & Wrath of the Regulator

Equity L/S Analyst | Forensic Accounting | India, Yellowstone Equity

Ankit Agrawal, CFA

Equity L/S Analyst | Forensic Accounting | India

Creating Wealth through Alpha and Compounding

Yellowstone Equity

Providing unbiased and independent research on Indian equities to global institutions and individual investors


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Regulatory Disclosure: 
Note that Ankit Agrawal (Proprietor of Yellowstone Equity) is a SEBI registered Research Analyst (Registration No.: INH000007216). Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors. Investment in securities market are subject to market risks. Read all the related documents carefully before investing.

Research Analyst Contact Details:
Address: A-412, Shilp Aaron, Sindhu Bhavan Road, Ahmedabad, Gujarat - 380059
Email: services@yellowstoneequity.com
Mobile: +91-7575817289

Compliance/Grievance Officer:
Name: Ankit Agrawal
Email: services@yellowstoneequity.com
Mobile: +91-7575817289
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<ul>
<li>Q3FY24 performance was slightly below expectation led by NIM margin compression and marginally elevated credit costs. Certain regulatory restrictions also dampened growth and profitability.</li>
<li>However, from a medium-term perspective, BAF is setting up well to be a sustained growth powerhouse. It has widened its product catalogue and is deepening the product availability per branch.</li>
<li>Led by growth tailwinds and market share gains, BAF has potential to grow at 25%+ for a prolonged period. The current headwinds seem temporary and provide a buying opportunity.</li>
</ul>


Q3FY24 performance was slightly below expectation led by NIM margin compression and marginally elevated credit costs. Certain regulatory restrictions also dampened growth and profitability.
However, from a medium-term perspective, BAF is setting up well to be a sustained growth powerhouse. It has widened its product catalogue and is deepening the product availability per branch.
Led by growth tailwinds and market share gains, BAF has potential to grow at 25%+ for a prolonged period. The current headwinds seem temporary and provide a buying opportunity.


Bajaj Finance (BAF): A Sustained Growth Powerhouse

External broker reports(aggregated public sources), Axis Direct

Axis Direct

External broker reports(aggregated public sources)

Axis Direct is the flagship brand under Axis Securities Limited, a subsidiary of Axis Bank in India. 

Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

<ul><li>Healthy operating metrics: BAF added 3.85 Mn customers (+24/8% YoY/QoQ) during the qtr. vs 3.1/3.6 Mn customer YoY/QoQ, taking the total customer base to 80.4 Mn customers (+22/5% YoY/QoQ).</li><li>The company booked ~9.9 Mn loans during the qtr (+26/15% YoY/QoQ).</li><li>The management had guided to add 13-14 Mn customers in FY24 thereby exiting with a customer base of 82.5-83 Mn customers.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Healthy operating metrics: BAF added 3.85 Mn customers (+24/8% YoY/QoQ) during the qtr. vs 3.1/3.6 Mn customer YoY/QoQ, taking the total customer base to 80.4 Mn customers (+22/5% YoY/QoQ).The company booked ~9.9 Mn loans during the qtr (+26/15% YoY/QoQ).The management had guided to add 13-14 Mn customers in FY24 thereby exiting with a customer base of 82.5-83 Mn customers.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Bajaj Finance Ltd. - Calibrated Growth Approach to Maximize Return Ratios, Maintain BUY

External broker reports(aggregated public sources), HDFC Securities

HDFC Securities

HDFC securities is the best online trading platform for stocks, IPOs, mutual fund in India. 

Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

<ul><li>Despite the rising scale and complexity of its operations, Bajaj Finance (BAF) has continued to deliver a healthy ~26% AUM CAGR from FY22-FY24E</li><li>This growth is largely attributed to a rebound in the acquisition engine through an omni-channel strategy, enhanced cross-sell of loans and other products, and the addition of new verticals</li><li>Despite the RBI-imposed embargo on Insta EMI cards and e-commerce loans (~4-5% of disbursements) and higher risk weights, we expect BAF to deliver on key metrics although the near-term growth is likely to taper off moderately.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Despite the rising scale and complexity of its operations, Bajaj Finance (BAF) has continued to deliver a healthy ~26% AUM CAGR from FY22-FY24EThis growth is largely attributed to a rebound in the acquisition engine through an omni-channel strategy, enhanced cross-sell of loans and other products, and the addition of new verticalsDespite the RBI-imposed embargo on Insta EMI cards and e-commerce loans (~4-5% of disbursements) and higher risk weights, we expect BAF to deliver on key metrics although the near-term growth is likely to taper off moderately.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Bajaj Finance: Value Emerging, Upgrade to BUY

<ul>
<li>
<a href="https://www.smartkarma.com/entities/bajaj-finance-ltd" target="_blank" data-smartkarma-citation="entities:8950:1" rel="noopener">Bajaj Finance Ltd ("BAF")</a> reported key performance metrics for Q3FY24. It reported strong growth, particularly in AUM which grew 7%+ QoQ and 35% YoY to reach INR 311,000cr.</li>
<li>Customer franchise grew 5%+ QoQ to reach 80.41mm, surpassing the 80mm mark. New loans booked grew to 9.86mm, a growth of 26% YoY and 15%+ QoQ.</li>
<li>The liability book also did well with deposits growing at around 6% QoQ and 35% YoY to reach INR 58,000cr.</li>
</ul>



Bajaj Finance Ltd ("BAF") reported key performance metrics for Q3FY24. It reported strong growth, particularly in AUM which grew 7%+ QoQ and 35% YoY to reach INR 311,000cr.
Customer franchise grew 5%+ QoQ to reach 80.41mm, surpassing the 80mm mark. New loans booked grew to 9.86mm, a growth of 26% YoY and 15%+ QoQ.
The liability book also did well with deposits growing at around 6% QoQ and 35% YoY to reach INR 58,000cr.


India

Bajaj Finance Limited is a financial services company that operates branches in India, which provide an assortment of financial services.

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Bajaj Finance Ltd (BAF IN)

Trouble in Paradise | India Credit Landscape & Wrath of the Regulator

India's credit landscape is evolving with regulatory challenges, but the RBI's proactive oversight of NBFCs sets it ahead of the curve, with more...

Pranav Bhavsar

Bajaj Finance (BAF): A Sustained Growth Powerhouse

BAF reported Q3FY24 PAT slightly below expectation due to adverse regulatory impact and slightly elevated credit costs. However these headwinds are...

Ankit Agrawal, CFA

Bajaj Finance Ltd. - Calibrated Growth Approach to Maximize Return Ratios, Maintain BUY

BAF added 3.85 Mn customers (+24/8% YoY/QoQ) during the qtr. vs 3.1/3.6 Mn customer YoY/QoQ, taking the total customer base to 80.4 Mn customers...

Axis Direct

Bajaj Finance: Value Emerging, Upgrade to BUY

Despite the rising scale and complexity of its operations, Bajaj Finance (BAF) has continued to deliver a healthy ~26% AUM CAGR from FY22-FY24E

HDFC Securities

Bajaj Finance: Q3FY24 Preview

BAF provided updates on key performance parameters for Q3FY24. It reported strong growth across AUM, new loans booked, customer acquisition and...

Ankit Agrawal, CFA

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Trouble in Paradise | India Credit Landscape & Wrath of the Regulator

​India's credit landscape is evolving with regulatory challenges, but the RBI's proactive oversight of NBFCs sets it ahead of the curve, with more...

Pranav Bhavsar

Bajaj Finance (BAF): A Sustained Growth Powerhouse

BAF reported Q3FY24 PAT slightly below expectation due to adverse regulatory impact and slightly elevated credit costs. However these headwinds are...

Ankit Agrawal, CFA

Bajaj Finance Ltd. - Calibrated Growth Approach to Maximize Return Ratios, Maintain BUY

BAF added 3.85 Mn customers (+24/8% YoY/QoQ) during the qtr. vs 3.1/3.6 Mn customer YoY/QoQ, taking the total customer base to 80.4 Mn customers...

Axis Direct

Bajaj Finance: Value Emerging, Upgrade to BUY

Despite the rising scale and complexity of its operations, Bajaj Finance (BAF) has continued to deliver a healthy ~26% AUM CAGR from FY22-FY24E

HDFC Securities

Bajaj Finance: Q3FY24 Preview

BAF provided updates on key performance parameters for Q3FY24. It reported strong growth across AUM, new loans booked, customer acquisition and...

Ankit Agrawal, CFA

India's credit landscape is evolving with regulatory challenges, but the RBI's proactive oversight of NBFCs sets it ahead of the curve, with more...