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.

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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

External broker reports(aggregated public sources), Motilal Oswal Financial Services Limited

Motilal Oswal

External broker reports(aggregated public sources)

Motilal Oswal Financial Services Limited

Motilal Oswal Financial Services Limited is an Indian diversified financial services firm offering a range of financial products and services. 

Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

<ul><li>Motilal Oswal's research report onBajaj Finance BAF’s 1QFY25 reported PAT grew 14% YoY to ~INR39.1b (in line).</li><li>NII grew 25% YOY to ~INR83.6b (in line).</li><li>Non-interest income stood at ~INR20.5b (+21% QoQ and +22% YoY) due to the resumption of EMI card sourcing and one-off recovery from written-off pool of loans of INR450m.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Motilal Oswal's research report onBajaj Finance BAF’s 1QFY25 reported PAT grew 14% YoY to ~INR39.1b (in line).NII grew 25% YOY to ~INR83.6b (in line).Non-interest income stood at ~INR20.5b (+21% QoQ and +22% YoY) due to the resumption of EMI card sourcing and one-off recovery from written-off pool of loans of INR450m.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Bajaj Finance - Navigating Stress in B2C; Credit Costs Elevated

External broker reports(aggregated public sources), Axis Direct

Axis Direct

Axis Direct is the flagship brand under Axis Securities Limited, a subsidiary of Axis Bank in India. 

Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

<ul><li>Operational Performance: BAF added 4.5 Mn customers (+16/38% YoY/QoQ) during the quarter vs 3.8/3.2 Mn customer YoY/QoQ, taking the total customer base to 88.1 Mn customers (+21/5% YoY/QoQ).</li><li>The company booked ~11 Mn loans during the quarter (+10/39% YoY/QoQ), though it was partially impacted by restrictions on 2 lending products (RBI ban lifted on 02 May’24).</li><li>AUM growth was strong at 31/7% YoY/QoQ, with growth healthy across segments.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Operational Performance: BAF added 4.5 Mn customers (+16/38% YoY/QoQ) during the quarter vs 3.8/3.2 Mn customer YoY/QoQ, taking the total customer base to 88.1 Mn customers (+21/5% YoY/QoQ).The company booked ~11 Mn loans during the quarter (+10/39% YoY/QoQ), though it was partially impacted by restrictions on 2 lending products (RBI ban lifted on 02 May’24).AUM growth was strong at 31/7% YoY/QoQ, with growth healthy across segments.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Bajaj Finance Ltd. - Mixed-Bag Performance, Performance Normalisation From H2FY25!

<ul><li>FY24 was a year characterised by an all-round strong performance for BAF despite regulatory obstacles in the form of (i) Increase in risk-weights for consumer finance eating into Tier I capital and (ii) Restrictions on 2 digital lending products – ‘eCOM’ and ‘instaEMI’, impacting loan booking in Q4FY24.</li><li>BAF continued to make significant progress on its Long-Range Strategy (LRS), launching four new products and maintaining a strong pipeline of future product launches.</li><li>Asset quality remained robust, better than pre-COVID levels. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

FY24 was a year characterised by an all-round strong performance for BAF despite regulatory obstacles in the form of (i) Increase in risk-weights for consumer finance eating into Tier I capital and (ii) Restrictions on 2 digital lending products – ‘eCOM’ and ‘instaEMI’, impacting loan booking in Q4FY24.BAF continued to make significant progress on its Long-Range Strategy (LRS), launching four new products and maintaining a strong pipeline of future product launches.Asset quality remained robust, better than pre-COVID levels. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Bajaj Finance Ltd. - Strong Performance Delivery Despite Multiple Challenges!

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 - Navigating Stress in B2C; Credit Costs Elevated

Motilal Oswal's research report onBajaj Finance BAF’s 1QFY25 reported PAT grew 14% YoY to ~INR39.1b (in line). NII grew 25% YOY to ~INR83.6b (in...

Motilal Oswal

Bajaj Finance Ltd. - Mixed-Bag Performance, Performance Normalisation From H2FY25!

The company booked ~11 Mn loans during the quarter (+10/39% YoY/QoQ), though it was partially impacted by restrictions on 2 lending products (RBI...

Axis Direct

Bajaj Finance Ltd. - Strong Performance Delivery Despite Multiple Challenges!

The company delivered strong RoA and RoE of 4.4% and 22%, respectively, in FY24 despite facing margin pressures and marginally higher credit costs.

Axis Direct

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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 - Navigating Stress in B2C; Credit Costs Elevated

Motilal Oswal's research report onBajaj Finance BAF’s 1QFY25 reported PAT grew 14% YoY to ~INR39.1b (in line). NII grew 25% YOY to ~INR83.6b (in...

Motilal Oswal

Bajaj Finance Ltd. - Mixed-Bag Performance, Performance Normalisation From H2FY25!

The company booked ~11 Mn loans during the quarter (+10/39% YoY/QoQ), though it was partially impacted by restrictions on 2 lending products (RBI...

Axis Direct

Bajaj Finance Ltd. - Strong Performance Delivery Despite Multiple Challenges!

The company delivered strong RoA and RoE of 4.4% and 22%, respectively, in FY24 despite facing margin pressures and marginally higher credit costs.

Axis Direct

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