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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Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/bajaj-finance-ltd" target="_blank" data-smartkarma-citation="entities:8950:1" rel="noopener">Bajaj Finance ("BAF")</a> reported a decent Q1FY25 with robust AUM growth, however, loan losses came in slightly elevated. AUM grew 31% YoY to reach INR 3,54,192cr.</li>
<li>Annualized credit cost inched up to 2.1% vs 1.75-1.85% guided for FY25. This was led largely by weak collection efficiency. BAF is working on enhancing its collection infrastructure.</li>
<li>BAF listed its housing finance subsidiary on Sep 16, unlocking value for the shareholders. It created history with highest-ever subscription amount and got listed at a premium of 114%.</li>
</ul>



Bajaj Finance ("BAF") reported a decent Q1FY25 with robust AUM growth, however, loan losses came in slightly elevated. AUM grew 31% YoY to reach INR 3,54,192cr.
Annualized credit cost inched up to 2.1% vs 1.75-1.85% guided for FY25. This was led largely by weak collection efficiency. BAF is working on enhancing its collection infrastructure.
BAF listed its housing finance subsidiary on Sep 16, unlocking value for the shareholders. It created history with highest-ever subscription amount and got listed at a premium of 114%.


Bajaj Finance: Mixed Q1, However Growth Trajectory Remains Intact

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

<ul>
<li>This Insight focuses on lenders operating in consumer finance, including MSME-focused NBFCs. </li>
<li>Companies in focus include <a href="https://www.smartkarma.com/entities/bajaj-finance-ltd" target="_blank" data-smartkarma-citation="entities:8950:1" rel="noopener">Bajaj Finance Ltd (BAF IN)</a>, <a href="https://www.smartkarma.com/entities/poonawalla-fincorp" target="_blank" data-smartkarma-citation="entities:3449:1" rel="noopener">Poonawalla Fincorp (POONAWAL IN),</a><a href="https://www.smartkarma.com/entities/sbfc-finance-limited" target="_blank" data-smartkarma-citation="entities:36713:1" rel="noopener">SBFC Finance Limited (SBFC IN)</a> &amp; <a href="https://www.smartkarma.com/entities/mas-financial-services-ltd" target="_blank" data-smartkarma-citation="entities:26639:1" rel="noopener">MAS Financial Services Ltd (MASFIN IN)</a>. </li>
<li>We also cover high yield lender <a href="https://www.smartkarma.com/entities/five-star-business-finance" target="_blank" data-smartkarma-citation="entities:35238:1" rel="noopener">Five Star Business Finance (FIVESTAR IN)</a>.  </li>
</ul>


This Insight focuses on lenders operating in consumer finance, including MSME-focused NBFCs. 
Companies in focus include Bajaj Finance Ltd (BAF IN), Poonawalla Fincorp (POONAWAL IN),SBFC Finance Limited (SBFC IN) &amp; MAS Financial Services Ltd (MASFIN IN). 
We also cover high yield lender Five Star Business Finance (FIVESTAR IN).  


Narrative and Numbers | Consumer & MSME Finance | FY24

<ul>
<li>BAF reported a decent Q4FY24 led by strong AUM growth and robust customer acquisition. Adjusted for the impact of the regulatory ban, Q4FY24 results were in line with the expectation.  </li>
<li>The biggest negative surprise in Q4FY24 was the 21bp NIM compression. NIM compressed led by AUM composition shifting incrementally to secured assets. </li>
<li>BAF is optimistic on growth across segments, except Rural B2C where risk metrics are somewhat elevated; however this should normalize, given Rural B2B is doing fine.</li>
</ul>


BAF reported a decent Q4FY24 led by strong AUM growth and robust customer acquisition. Adjusted for the impact of the regulatory ban, Q4FY24 results were in line with the expectation.  
The biggest negative surprise in Q4FY24 was the 21bp NIM compression. NIM compressed led by AUM composition shifting incrementally to secured assets. 
BAF is optimistic on growth across segments, except Rural B2C where risk metrics are somewhat elevated; however this should normalize, given Rural B2B is doing fine.


Bajaj Finance (BAF): Strengthening Franchise to Sustain Growth Longevity

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

<ul>
<li>Kakao Bank (KB) is South Korea’s largest digital bank. It's a subsidiary of Kakao, which holds a 27.3% stake post listing.</li>
<li>It is a branchless digital bank that only started operations in 2017. As of Sep 21, it had a loan book of US$21bn, deposit base of US$24bn and 17.4m customers.</li>
<li>Even though Kakao started operations only in July 2017, by 2020 it had already garnered more than 1% market share of overall loans and deposits in South Korea.</li>
</ul>


Kakao Bank (KB) is South Korea’s largest digital bank. It's a subsidiary of Kakao, which holds a 27.3% stake post listing.
It is a branchless digital bank that only started operations in 2017. As of Sep 21, it had a loan book of US$21bn, deposit base of US$24bn and 17.4m customers.
Even though Kakao started operations only in July 2017, by 2020 it had already garnered more than 1% market share of overall loans and deposits in South Korea.


2022 High Conviction - Kakao Bank - A Long Way to Go

APAC IPOs & Placements, Aequitas Research

Akshat Shah

APAC IPOs & Placements

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/zinka-logistics" target="_blank" data-smartkarma-citation="entities:43728:1" rel="noopener">Blackbuck (1355652D IN)</a>  raised about US$130m in its India IPO.</li>
<li>Zinka Logistics (Blackbuck) is India’s largest digital platform for truck operators (in terms of number of users), with 963,345 truck operators transacting on its platform in FY24, as per Redseer.</li>
<li>We have looked at the company’s past performance and valuations in our earlier notes. In this note, we talk about the trading dynamics.</li>
</ul>



Blackbuck (1355652D IN)  raised about US$130m in its India IPO.
Zinka Logistics (Blackbuck) is India’s largest digital platform for truck operators (in terms of number of users), with 963,345 truck operators transacting on its platform in FY24, as per Redseer.
We have looked at the company’s past performance and valuations in our earlier notes. In this note, we talk about the trading dynamics.


Zinka Logistics IPO Trading - Subdued Demand; Lags Recent Listings

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)

Bajaj Finance: Mixed Q1, However Growth Trajectory Remains Intact

BAF reported a mixed Q1FY25. It reported strong AUM growth, however, profitability did not grow as much in tandem, due to elevated credit cost and...

Ankit Agrawal, CFA

Narrative and Numbers | Consumer & MSME Finance | FY24

Insight on lenders in consumer finance, including Bajaj Finance, Poonawalla Fincorp, SBFC Finance, MAS Financial Services, and Five Star Business...

Pranav Bhavsar

Bajaj Finance (BAF): Strengthening Franchise to Sustain Growth Longevity

BAF is doing all the right things to continue to strengthen its franchise to sustain high growth for a prolonged period. An investment at the...

Ankit Agrawal, CFA

2022 High Conviction - Kakao Bank - A Long Way to Go

Kakao Bank (KB) is South Korea’s largest digital bank. It's a subsidiary of Kakao, which holds a 27.3% stake post listing.

Sumeet Singh

Zinka Logistics IPO Trading - Subdued Demand; Lags Recent Listings

Zinka Logistics (Blackbuck) raised about US$130m in its India IPO. In this note, we talk about the demand and trading dynamics.

Akshat Shah

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Bajaj Finance: Mixed Q1, However Growth Trajectory Remains Intact

BAF reported a mixed Q1FY25. It reported strong AUM growth, however, profitability did not grow as much in tandem, due to elevated credit cost and...

Ankit Agrawal, CFA

Narrative and Numbers | Consumer & MSME Finance | FY24

​Insight on lenders in consumer finance, including Bajaj Finance, Poonawalla Fincorp, SBFC Finance, MAS Financial Services, and Five Star Business...

Pranav Bhavsar

Bajaj Finance (BAF): Strengthening Franchise to Sustain Growth Longevity

BAF is doing all the right things to continue to strengthen its franchise to sustain high growth for a prolonged period. An investment at the...

Ankit Agrawal, CFA

2022 High Conviction - Kakao Bank - A Long Way to Go

Kakao Bank (KB) is South Korea’s largest digital bank. It's a subsidiary of Kakao, which holds a 27.3% stake post listing.

Sumeet Singh

Zinka Logistics IPO Trading - Subdued Demand; Lags Recent Listings

Zinka Logistics (Blackbuck) raised about US$130m in its India IPO. In this note, we talk about the demand and trading dynamics.

Akshat Shah

Insight on lenders in consumer finance, including Bajaj Finance, Poonawalla Fincorp, SBFC Finance, MAS Financial Services, and Five Star Business...