Bajaj Finance shares in focus as AUM growth guidance cut after Q2 results

Shares of Bajaj Finance Ltd

., one of India's largest non-bank lenders, will be in focus on Tuesday, November 11, as the stock will react to its September quarter results that were reported after market hours on Monday.

The management of Bajaj Finance has cut its growth guidance for Assets Under Management (AUM) for the full financial yer. It now expects AUM growth to be between 22% and 23%, compared to the earlier projection of 24% to 25%.

Bajaj Finance cut its AUM growth guidance owing to lower growth in the mortgage and SME segments. It now expects SME growth to range between 10% and 12%, while MSME growth will bottom in the first quarter of the next financial year.

Additionally, the management also expects credit costs to be at the higher end of the 1.85% to 1.95% guidance range with improvement starting the next financial year. Elevated credit costs resulted in Bajaj Finance cutting down on 25% of its unsecured MSME volumes.

On expected lines, Bajaj Finance's Net Interest Income (NII) increased by 22% from last year to ₹10,785 crore, while its Net Profit increased by 23.3% year-on-year to ₹4,948 crore.

Asset quality saw some pressure on a sequential basis with Gross NPA at 1.24% from 1.03% last quarter, while Net NPA stood at 0.6% from 0.5% last quarter. Net Interest margins remained flat compared to last year.

Expectations of Bajaj Finance delivering a strong quarter were already built-in as the stock ended at the day's high on Monday ahead of the results announcement, gaining 1.9% to end at ₹1,086.6. The stock ended close to its 52-week high of ₹1,102.5. Shares of Bajaj Finance have gained 5% so far in the last one month.