Bajaj Finance Share – What Future Is There?

Introduction

Bajaj Finance is a well-known NBFC and one of the largest in India. It has been known for its strong performance and profitability, but that’s not enough to keep up with the changing times. The company recently reported its quarterly earnings and this is when everything went south for them:

Bajaj finance share is currently in the news for all the wrong reasons.

Bajaj Finance share is currently in the news for all the wrong reasons. The company's asset quality reported a rise of 1% compared to the last quarter, which was a positive sign but it still remains negative.

The reason for this is that since debtors are not paying their dues on time, NPAs are increasing which will eventually lead to a significant rise in bad loans.

After the recent quarterly earnings, Bajaj finance stock price fell by 7%.

After the recent quarterly earnings, Bajaj finance stock price fell by 7%. This is not surprising. The company has been facing a tough time in terms of collection and higher NPAs that have led to higher provisioning.

The company announced a net profit of Rs 11 crore for FY19 as against Rs 5 crore reported in FY18. The reason could be because of lower interest income, as well as lower provisioning on account of additional asset acquisition during FY19 (Rs 464 crores).

The company’s asset quality reported a rise of 1% compared to the last quarter.

As per the recent PNB data, NPAs have increased by 1% in the December quarter. The reasons for this increase include higher provisions for bad loans and restructured advances. Bajaj Finance’s asset quality report has been negative for over three years now and it is showing no signs of improvement.

The company has already made several efforts to improve its business model, but these seem to be having little impact on its performance metrics. It has also slashed expenses by 20% over the last two quarters, which means that it cannot continue cutting costs indefinitely without affecting profitability significantly

It is important to note that since debtors are not paying their dues on time, NPAs are increasing.

It is important to note that since debtors are not paying their dues on time, NPAs are increasing.

The reason for this is simple – customers are not getting paid by their customers due to economic slowdown. Customers are in trouble because of global economic slowdown and this causes them not to pay debts timely.

In a report from Bajaj Finance, it was noted that NPAs had crossed over INR 12,000 crore.

In a report from Bajaj Finance, it was noted that NPAs had crossed over INR 12,000 crore. This is a cause for concern as it shows how many people are not paying back their loans on time and thus are responsible for a huge amount of NPAs. There is also no clarity on whether these companies will be able to recover these funds or if they will make it up by selling off their assets which could lead to further financial distress in the country.

So much so, even the management of Bajaj Finance is worried and has admitted that collections are weak.

So much so, even the management of Bajaj Finance is worried and has admitted that collections are weak. The stock has fallen by 7% this year and its NPA ratio has increased to 21% as on March 31.

In a bid to reduce its risk exposure, Bajaj Finance has cut down its exposure to bad loans by Rs 10 billion over last year’s level. In addition, it has taken steps like extending the moratorium period for stressed assets under NCLT (National Company Law Tribunal) process by another six months up till December 2020; further refinancing of NPAs through sale or conversion at list price; reduction in cost of funds available through issuance of bonds; etc., according to sources close with the company

This is something significant because NBFCs like Bajaj Finance were growing at a phenomenal pace.

Bajaj Finance was growing at a phenomenal pace. The NBFCs had been growing faster than the economy for quite some time now and this was something significant because NBFCs like Bajaj Finance were growing at a phenomenal pace.

It is imperative now to wait and see when will the lockdown be lifted as it is hurting NBFCs like Bajaj Finance.

Bajaj Finance is a leading NBFC. It operates in the areas of consumer finance and asset financing. Bajaj Finance recently reported its quarterly results on 13 May 2019, which showed that its net profit fell by 7% to INR 1.20 billion (USD 19 million) compared with the same period last year. NPAs have crossed over INR 12,000 crore as of end March 2020, which represents nearly half of their total loan portfolio at that time.

The management has admitted that weak collections are hurting them badly and they will have to take an additional write-down charge in the current quarter due to this reason alone! The company’s stock price fell by 7% after this announcement was made public – but it is imperative now not only wait but also see when will this lockdown be lifted as it is hurting NBFCs like Bajaj Finance like hell right now

Conclusion

If you are a Bajaj finance share holder, I would recommend that you wait and see if there are any changes in the way NBFCs like Bajaj Finance will be managed. In case the situation is not improved, then it may be better to sell your shares now before they fall further.

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