HDFC Securities: Bajaj Finance’s Prudent Provisioning Hits Profits
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HDFC Securities Report
While Bajaj Finance Ltd.’s Q2 FY21 operating performance was in line with estimates, earnings were lower on account of higher than expected provisions.
The management was prudent in its approach to growth and provisioning. Even as we build higher provisions, our earnings estimates remain largely unchanged as we factor in a slight improvement in cost metrics.
Our outlook on the company’s long-term prospects remains positive. We continue to believe that current valuations do not fully capture the company’s high return on asset employed potential.
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