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

Equity Bottom-Up

<ul>
<li>Our popular, text-only weekly is back, hopefully in an improved version, and aims to be more consistent throughout this financial year.</li>
<li>The market structure and momentum seem to be positive. Upcoming earnings season and elections are likely to be key drivers going forward.</li>
<li>Stocks discussed 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/sbi-cards-payment-services-limited" target="_blank" data-smartkarma-citation="entities:28662:1" rel="noopener">SBI Cards &amp; Payment Services (SBICARD IN)</a>, <a href="https://www.smartkarma.com/entities/honasa-consumer-ltd" target="_blank" data-smartkarma-citation="entities:36117:1" rel="noopener">Honasa Consumer (HONASA IN)</a> and <a href="https://www.smartkarma.com/entities/delta-corp-ltd" target="_blank" data-smartkarma-citation="entities:4627:1" rel="noopener">Delta Corp Ltd (DELTA IN)</a> </li>
</ul>


Our popular, text-only weekly is back, hopefully in an improved version, and aims to be more consistent throughout this financial year.
The market structure and momentum seem to be positive. Upcoming earnings season and elections are likely to be key drivers going forward.
Stocks discussed include Bajaj Finance Ltd (BAF IN), SBI Cards &amp; Payment Services (SBICARD IN), Honasa Consumer (HONASA IN) and Delta Corp Ltd (DELTA IN) 


[#20] Namaste India 🙏 | Bajaj Finance's Catch Up

<ul>
<li>India's Credit Landscape has changed and is facing structural and regulatory challenges.</li>
<li>The Indian regulator (RBI), particularly in its oversight of underwriting practices and the behavior of Non-Banking Financial Companies (NBFCs), is commendably proactive, positioning it ahead of the curve.</li>
<li>We expect more such steps in other parts of the credit funnel. The recent crack down along with the stock underperformance is here to stay and possibility intensify. </li>
</ul>


India's Credit Landscape has changed and is facing structural and regulatory challenges.
The Indian regulator (RBI), particularly in its oversight of underwriting practices and the behavior of Non-Banking Financial Companies (NBFCs), is commendably proactive, positioning it ahead of the curve.
We expect more such steps in other parts of the credit funnel. The recent crack down along with the stock underperformance is here to stay and possibility intensify. 


Trouble in Paradise | India Credit Landscape & Wrath of the Regulator

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


-------------
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
-------------

<ul>
<li>Q3FY24 performance was slightly below expectation led by NIM margin compression and marginally elevated credit costs. Certain regulatory restrictions also dampened growth and profitability.</li>
<li>However, from a medium-term perspective, BAF is setting up well to be a sustained growth powerhouse. It has widened its product catalogue and is deepening the product availability per branch.</li>
<li>Led by growth tailwinds and market share gains, BAF has potential to grow at 25%+ for a prolonged period. The current headwinds seem temporary and provide a buying opportunity.</li>
</ul>


Q3FY24 performance was slightly below expectation led by NIM margin compression and marginally elevated credit costs. Certain regulatory restrictions also dampened growth and profitability.
However, from a medium-term perspective, BAF is setting up well to be a sustained growth powerhouse. It has widened its product catalogue and is deepening the product availability per branch.
Led by growth tailwinds and market share gains, BAF has potential to grow at 25%+ for a prolonged period. The current headwinds seem temporary and provide a buying opportunity.


Bajaj Finance (BAF): A Sustained Growth Powerhouse

External broker reports(aggregated public sources), Axis Direct

Axis Direct

External broker reports(aggregated public sources)

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>Healthy operating metrics: BAF added 3.85 Mn customers (+24/8% YoY/QoQ) during the qtr. vs 3.1/3.6 Mn customer YoY/QoQ, taking the total customer base to 80.4 Mn customers (+22/5% YoY/QoQ).</li><li>The company booked ~9.9 Mn loans during the qtr (+26/15% YoY/QoQ).</li><li>The management had guided to add 13-14 Mn customers in FY24 thereby exiting with a customer base of 82.5-83 Mn customers.</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.

Healthy operating metrics: BAF added 3.85 Mn customers (+24/8% YoY/QoQ) during the qtr. vs 3.1/3.6 Mn customer YoY/QoQ, taking the total customer base to 80.4 Mn customers (+22/5% YoY/QoQ).The company booked ~9.9 Mn loans during the qtr (+26/15% YoY/QoQ).The management had guided to add 13-14 Mn customers in FY24 thereby exiting with a customer base of 82.5-83 Mn customers.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. - Calibrated Growth Approach to Maximize Return Ratios, Maintain BUY

External broker reports(aggregated public sources), HDFC Securities

HDFC Securities

HDFC securities is the best online trading platform for stocks, IPOs, mutual fund 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>Despite the rising scale and complexity of its operations, Bajaj Finance (BAF) has continued to deliver a healthy ~26% AUM CAGR from FY22-FY24E</li><li>This growth is largely attributed to a rebound in the acquisition engine through an omni-channel strategy, enhanced cross-sell of loans and other products, and the addition of new verticals</li><li>Despite the RBI-imposed embargo on Insta EMI cards and e-commerce loans (~4-5% of disbursements) and higher risk weights, we expect BAF to deliver on key metrics although the near-term growth is likely to taper off moderately.</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.

Despite the rising scale and complexity of its operations, Bajaj Finance (BAF) has continued to deliver a healthy ~26% AUM CAGR from FY22-FY24EThis growth is largely attributed to a rebound in the acquisition engine through an omni-channel strategy, enhanced cross-sell of loans and other products, and the addition of new verticalsDespite the RBI-imposed embargo on Insta EMI cards and e-commerce loans (~4-5% of disbursements) and higher risk weights, we expect BAF to deliver on key metrics although the near-term growth is likely to taper off moderately.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: Value Emerging, Upgrade to BUY

India

Shriram Finance Limited provides consumer finance services. The Company offers automobile, commercial vehicle, business, and gold loan services. Shriram Finance serves customers in India.

Cholamandalam Investment and Finance Company Limited operates as a financial services provider. The Company offers vehicle finance, home equity loans, investment advisory, stock broking, and other financial services to customers.

Cholamandalam Investment and Finance (CIFC IN)

Muthoot Finance Ltd. is a gold financing company. The Company provides personal and business loans secured by gold jewellery, or Gold Loans primarily to individuals who possess gold jewelry but can't access formal credit lines.

SBI Cards and Payment Services Private Limited provides credit card services. The Company offers payment products and services in the form of corporate and credit cards with incentive and rewards programs. SBI Cards and Payment Services serves customers in India.

SBI Cards & Payment Services (SBICARD IN)

Sundaram Finance Ltd., together with its subsidiaries, provides various financial products and services in India. The Company offers savings products, car and commercial vehicle finance, insurance products, home loans and logistics services. Sundaram is based in Chennai, India.

Mahindra & Mahindra Financial Services Limited is a finance company that provides finance to prospective buyers of Mahindra range of utility vehicles and tractors.  The Company extends finance through hire purchase/loan and lease modes.  Mahindra & Mahindra has a network of branches located across India.

Mahindra & Mahindra Fin Services Ltd. (MMFS IN)

Manappuram Finance Ltd. is a non-banking finance company. The Company offers loans against gold collateral, business loans, vehicle loans, foreign exchange and money transfer services; and sells gold coins.

CreditAccess Grameen Limited provides consumer finance services. The Company offers income generation, home improvement, emergency, and family welfare loans, as well as retail finance, insurance, and healthcare programs. CreditAccess Grameen serves clients in India.

Ujjivan Financial Services Ltd. provides financial services. The Company offers business, family, education, emergency, housing, and livestock loans. Ujjivan Financial Services serves customers throughout India.

MAS Financial Services Limited provides retail financial services. The Company offers loans and other financial services for homes, two wheeler vehicles, industrial machinery, properties, agricultural use, commercial vehicles, and insurance products. MAS Financial Services offers its services to small and medium enterprises in India.

Capital One Financial Corporation is a diversified bank. The Bank, through its subsidiaries, offers a broad spectrum of financial products and services to consumers, small businesses and commercial clients both domestically and internationally.  Capital One has bank locations in Connecticut, Louisiana, New Jersey, New York, and Texas.

Discover Financial Services is a credit card issuer and electronic payment services company.  The Company issues credit cards and offers student and personal loans, as well as savings products such as certificates of deposit and money market accounts  and operates an automated teller machine(ATM)/debit network, which includes ATMs, as well as POS terminals nationwide.

Synchrony Financial operates as a consumer financial services company. The Company provides  a range of credit products through programs we have established with a diverse group of national and regional retailers, local merchants, manufacturers, buying groups, industry associations and healthcare service providers.

Ally Financial Inc. is a automotive financial services company powered by a direct banking franchise. The Company operates as a financial holding company.

OneMain Holdings Inc. provides consumer financial services. The Company provides responsible loan products to customers through its branch network and through its centralized operations. OneMain Holdings operates in the United States.

Credit Acceptance Corporation provides funding, receivables management, collection, sales training, and related services to automobile dealers.  The Company provides indirect financing for buyers with limited access to traditional sources of consumer credit.  Credit Acceptance operates in the United States.

SLM Corporation, commonly known as Sallie Mae, provides education funding, originating and servicing of U.S. government guaranteed and private student loans.  The Company, through its subsidiaries, also provides debt management services and business and technical products to a range of clients including colleges, universities and loan guarantors.

ACOM CO., LTD is a consumer financing company.  The Company provides financial services such as secured/unsecured loans and consumer installment credits.

Nelnet, Inc. is a consumer finance company that provides products and services to participants in the education finance process.  The Company originates, holds, and services education loans and offers a broad range of financial services and technology-based products, including student loan origination and lending, student loan, and guarantee services.

FirstCash Holdings, Inc. owns and operates pawn stores. The Company focuses on serving cash and credit constrained consumers through its retail pawn locations. FirstCash Holdings serves customers worldwide.

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)

[#20] Namaste India 🙏 | Bajaj Finance's Catch Up

Text-only weekly returning with improvements, Stocks discussed include Bajaj Finance, SBI Cards, Honasa Consumer, and Delta Corp.

Pranav Bhavsar

Trouble in Paradise | India Credit Landscape & Wrath of the Regulator

India's credit landscape is evolving with regulatory challenges, but the RBI's proactive oversight of NBFCs sets it ahead of the curve, with more...

Pranav Bhavsar

Bajaj Finance (BAF): A Sustained Growth Powerhouse

BAF reported Q3FY24 PAT slightly below expectation due to adverse regulatory impact and slightly elevated credit costs. However these headwinds are...

Ankit Agrawal, CFA

Bajaj Finance Ltd. - Calibrated Growth Approach to Maximize Return Ratios, Maintain BUY

BAF added 3.85 Mn customers (+24/8% YoY/QoQ) during the qtr. vs 3.1/3.6 Mn customer YoY/QoQ, taking the total customer base to 80.4 Mn customers...

Axis Direct

Bajaj Finance: Value Emerging, Upgrade to BUY

Despite the rising scale and complexity of its operations, Bajaj Finance (BAF) has continued to deliver a healthy ~26% AUM CAGR from FY22-FY24E

HDFC Securities

Price Gauge

52-week Range

Market Cap (USDm)

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[#20] Namaste India 🙏 | Bajaj Finance's Catch Up

​Text-only weekly returning with improvements, Stocks discussed include Bajaj Finance, SBI Cards, Honasa Consumer, and Delta Corp.

Pranav Bhavsar

Trouble in Paradise | India Credit Landscape & Wrath of the Regulator

​India's credit landscape is evolving with regulatory challenges, but the RBI's proactive oversight of NBFCs sets it ahead of the curve, with more...

Pranav Bhavsar

Bajaj Finance (BAF): A Sustained Growth Powerhouse

BAF reported Q3FY24 PAT slightly below expectation due to adverse regulatory impact and slightly elevated credit costs. However these headwinds are...

Ankit Agrawal, CFA

Bajaj Finance Ltd. - Calibrated Growth Approach to Maximize Return Ratios, Maintain BUY

BAF added 3.85 Mn customers (+24/8% YoY/QoQ) during the qtr. vs 3.1/3.6 Mn customer YoY/QoQ, taking the total customer base to 80.4 Mn customers...

Axis Direct

Bajaj Finance: Value Emerging, Upgrade to BUY

Despite the rising scale and complexity of its operations, Bajaj Finance (BAF) has continued to deliver a healthy ~26% AUM CAGR from FY22-FY24E

HDFC Securities

Text-only weekly returning with improvements, Stocks discussed include Bajaj Finance, SBI Cards, Honasa Consumer, and Delta Corp.

India's credit landscape is evolving with regulatory challenges, but the RBI's proactive oversight of NBFCs sets it ahead of the curve, with more...