Top Indian Companies: Bajaj Finserv Limited

Bajaj Finserv Limited is an Indian non-banking financial services company headquartered in the city of Pune, India.

It is focused on lending, asset management, wealth management and insurance. The company employs over 20,154 employees at 1,409 locations, and is engaged in consumer finance businesses, life insurance, and general insurance. Apart from financial services, it is also active in wind–energy generation with an installed capacity of 65.2 MW

Subsidiaries

Bajaj Allianz Life Insurance is a joint venture between Bajaj Finserv and Allianz SE. Being one of the private insurance companies in India, it offers insurance products for financial planning and security.

Bajaj Allianz General Insurance is a private general insurance company in India.[18] It is another joint venture between Bajaj Finserv Limited and Allianz SE. It is headquartered in Pune with offices in over 200 cities in India.

Shareholding Pattern

The Shareholding Pattern page of Bajaj Finserv Ltd. presents the Promoter's holding, FII's holding, DII's Holding, and Share holding by general public etc.

Holder's Name No of Shares % Share Holding

No of Shares 159137444 100%

Promoters 96757398 60.8%

Foreign Institutions 13977755 8.78%

Banks/Mutual Funds 5803767 3.65%

Others 11528314 7.24%

General Public 25946055 16.3%

Financial Institutions 4930206 3.1%

GDR 193949 0.12%

FY2023 Q4 and Full Year Results

Bajaj Finserv on Wednesday reported a 31 per cent jump in its consolidated net profit at Rs 1,769 crore for the fourth quarter ended in March 2023.

The company had posted a net profit of Rs 1,346 crore during the corresponding January-March period of 2021-22.

The total consolidated income during the March 2023 quarter increased to Rs 23,625 crore, as against Rs 18,862 crore in the corresponding period of the previous financial year, BFL, the holding company for the various financial services businesses under the Bajaj group, said in a regulatory filing.

The board recommended a dividend of Rs 0.80 per share or 80 per cent on face value of Re 1. The total amount of dividend is Rs 127.43 crore as compared to Rs 63.65 crore.

For the financial year 2022-23, the company witnessed 41 per cent increase in profit at Rs 6,417 crore, as against Rs 4,557 crore in the previous fiscal.

The total consolidated income rose to Rs 82,072 crore, as against Rs 68,439 crore in the previous financial year.

"With Covid-19 threat having waned, there was significant increase in vehicles on the road and non-Covid treatments which had been postponed earlier, resulting in higher frequency of claims for the general insurance sector. In this environment of higher interest rates and insurance claims, our companies continued to do well," it said.

During the year, the general insurance arm posted a profit of Rs 1,348 crore, as against Rs 1,339 crore in the previous fiscal.

As on March 31, 2023, solvency ratio was 391 per cent, which is well above the minimum regulatory requirement of 150 per cent.

The life insurance arm reported net new business value (NBV) of Rs 950 crore, as against Rs 621 crore in the previous year.

Brokerage Outlook

KRChoksey Institutional, Brokerage, expect a CAGR of 23% in advances over FY21-24E. GNPA and NNPA stood at 2.45% and 1.10% in Q1FY22 from 2.96% and 1.46%, respectively, in Q1FY22. GNPA as of 30 September 2021 reduced to INR 4,103 Cr vs. INR 4,737 Cr as of 30 June 2021.

KRChoksey expect revenues to continue to show strong performance from H2FY22E. Brokerage have factored in a revenue CAGR of 8.6% over FY21-24E and a PAT CAGR of 20.6% over the same period. The insurance businesses are well positioned to capture the long-term structural growth opportunities. For BAF, the business transformation strategy adopted, will act as a trigger for upcoming growth and to sustain 25% YoY growth target.

Bajaj Finserv has rallied ~8% since our last update. Brokerage have used the SoTP approach to arrive at a target of INR 19,674 per share from INR 17,187 per share earlier; (3.25x P/EV for BALIC on FY24E EVPS; 2.8x P/B for BAGIC on FY24E; and 8.3x P/ABV on FY24E for BFL); indicating an upside potential of 10.2% over CMP. Accordingly, KRChoksey revise our rating to an “ACCUMULATE” (previously HOLD) on the shares of Bajaj Finserv

Esg and Sustainability

BFL is committed to contribute towards ensuring a clean and sustainable environment by continuously improving its environmental and sustainability performance. BFL’s code of conduct includes respecting the environment, eliminating waste and conserving resources as working norms.

BFL also has Environmental policy integrating sound environmental practices and governance systems in its day-to-day operations to minimize environmental impacts. BFL, being a NBFC, neither has a sizeable consumption of any raw material nor produces any tangible goods. Its activities are limited to providing financial solutions to serve the needs of the people.