Bajaj Finance Q2 Results Are Out And Situation Seems Grim For But Is It An Opportunity In Disguise.
Bajaj Finance is the biggest player in the finance and Investments sector it has its it’s wings spread over in retail as well as SMEs and B2B segment essentially it’s has been a market changer when it comes to small scale finance in the Indian Economy.
With a market cap of 1.99 Lakh Crores. a number number which speaks more than enough about why the stocks is a major player in the Indian Economy and a revenue of $718 million we know Bajaj finance is a serious player in the finance industry.
What has worked out for the company
Some things which have worked out for Bajaj finance in the past as well as this results as well is the bullishness for the stock Bajaj Finance packs a serious Punch when you see it’s past profit performance which stands at 43.44% net CAGR in last 5 years.
One of the things that has worked out for the company has been it’s ability of decreasing it’s NPA in the time of crisis since the last Quarter when the gross NPAs for Bajaj Finance stood at 1.40% they have decreased to 1.03% now.
Which is significantly lower since a last few quarters.
While the eps has stayed steady for the company has performed well in terms of ROE as well which stands at 21% in last 5 years.
Coupled with the fact that FIIs have increased their holdings in the company 0.07 % despite the negative results.
What are the risks involved
QoQ company has lost significantly in terms of r in PBT , Revenue and Operating profit while the company has been in the financial sector overall sector is still recovering as many people who would have lost jobs or income means less spending and less loans for the financial institutions.
Overall Bajaj FInance is a strong stock with promising long term financials with strong sentiment support from the market as well but the last 2 Quarters company seems to be affected due to lockdowns and has lost some business as well.In the long term our recommendation would be buy / Hold and for the short term stock may not perform as good as the competitors.