27 October 2016
2QFY17 Results Update | Sector:
Financials
Bajaj Finance
Buy
BSE SENSEX
27,916
Bloomberg
Equity Shares (m)
M.Cap.(INR b)/(USD b)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
Avg Val, (INR m)
Free float (%)
Financials & Valuations (INR b)
Y/E March
2016 2017E
NII
40.3
53.6
PPP
25.1
36.1
PAT
12.8
18.7
EPS (INR)
23.9
34.9
EPS Gr. (%)
33.4
46.1
BV/Sh. (INR)
137 166.6
RoA onAUM (%)
3.2
3.5
RoE (%)
21.1
23.0
Payout (%)
2.9
14.0
Valuations
P/E (x)
46.3
31.7
P/BV (x)
8.1
6.6
Div. Yield (%)
0.2
0.2
S&P CNX
8,615
BAF IN
535.5
591.7/8.9
1,180/512
0/53/105
934
42.7
CMP: INR1,105
TP: INR1,281 (+16%)
2018E
69.2
47.5
24.0
44.9
28.6
204.9
3.4
24.2
14.0
24.6
5.4
0.3
Bajaj Finance’s (BAF) 2QFY17 PAT increased 46% YoY to INR4.1b (4%
miss). Strong AUM growth (+38% YoY), improvement in margins (+19bp
YoY) and stable asset quality were the key highlights of the quarter.
AUM continued its robust growth trajectory (+38% YoY, +5.5% QoQ) to
cross the INR523b mark, driven by all segments, barring LAP. Over past
few quarters, the company has turned cautious on DSA-sourced LAP and
started to source more business in-house. This segment will witness pick-
up in growth from next quarter as the base effect plays out.
Personal cross-sell loans grew robustly by 61% to almost reach INR50b.
This is the third consecutive quarter of 50%+ AUM growth in this
segment. Other major growth drivers in the quarter were SME loans
(+55% YoY) and LAS (+82% YoY). AUM mix was largely stable QoQ.
Management has turned slightly cautious on consumer durable finance,
and has made a tactical decision to pull back 15-20% during the festive
season. Depending on the portfolio performance over next few months,
management will reconsider its strategy again. We view this as a prudent
and proactive decision as it would help negate any asset quality concerns
(on CD portfolio) in ensuring quarters. Moreover, we do not see this
move impacting growth significantly, given that the company is a
diversified lender and has other growth engines.
Asset quality remained healthy with GNPLs at 1.58% v/s 1.47% in 1QFY17
and 1.67% (150dpd) in 2QFY16.
Valuation and view:
BAF continues to reap the benefits of healthy
consumer demand and is a dominant player in the consumer durable
financing segment. It continues to increase its market share in consumer
as well as other businesses. While yields would remain under pressure
due to a lower share of CD financing, the company continues to diversify
its liability mix – bank borrowings account for 38% of total borrowings
compared to 45% in the prior quarter. The stock is trading at 6.6x/5.4x
FY17/18E BV. We value the stock at INR1,281 based on RI model,
implying PBV of 5.5x Sep 2018E. Maintain
Buy.
Sunesh Khanna
(Sunesh.Khanna@MotilalOswal.com); +91 22 3982 5521
Alpesh Mehta
(Alpesh.Mehta@MotilalOswal.com)/Piran
Engineer
(Piran.Engineer@MotilalOswal.com); +91 22 3980 4393
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.

Bajaj Finance
Exhibit 1: Quarterly
Performance v/s Estimates (INR m)
Y/E March
Income from operations
Other Operating Income
Operating Income
YoY Growth (%)
Interest expenses
Net Income
YoY Growth (%)
Other income
Total Income
Operating Expenses
Operating Profit
YoY Growth (%)
Provisions and Cont.
Profit before Tax
Tax Provisions
Net Profit
YoY Growth (%)
Loan Growth (%)
Borrowings Growth (%)
Cost to Income Ratio (%)
Tax Rate (%)
2QFY17E
22,850
1,229
24,079
43.3
9,540
14,540
47.6
200
14,740
6,280
8,460
49.8
2,000
6,460
2,229
4,231
51.4
38.0
39.0
42.6
34.5
2QFY17A
21,802
1,668
23,470
39.7
9,562
13,909
41.2
190
14,098
6,144
7,954
40.8
1,691
6,263
2,185
4,078
45.9
38.0
39.0
43.6
34.9
Var (%)
-5
36
-3
0
-4
Comments
Calc. margins improve 19bp YoY
-2
-6
-15
-3
-2
-4
Cost/Income in line with expectations
Asset quality was largely stable
Marginally lower net income led to slightly lower PAT
E: MOSL Estimates
AUM growth to remain robust; some pullback in consumer durables
AUM growth continued its robust trajectory (+38% YoY, 5.5% QoQ) and crossed
INR523b.
Growth was driven by all segments barring LAP (5% YoY decline). Over the past
few quarters, the company turned cautious on DSA-sourced LAP and started to
source more business in-house. This segment will witness a pick-up in growth
from next quarter, as the base effect plays out.
BAF will pull back on consumer durable financing over the next few months as
part of a tactical decision. As a result, AUM growth will be impacted, as 35% of
CD business happens in 3Q seasonally.
We view this as a prudent and proactive decision, as it would help negate any
asset quality concerns (on CD portfolio) in ensuring quarters. Moreover we don’t
see this move impacting growth significantly as being the most diversified lender
the company has other engines which continue to fire.
Personal loan cross-sell loans grew a robust 61% to almost reach INR50b. This is
the third consecutive quarter of 50%+ AUM growth in this segment.
Other major growth drivers in the quarter were SME loans (up 55% YoY) and LAS
(up 82% YoY).
AUM mix is largely stable QoQ, with share of consumer finance at 46%, SME at
39%, Commercial finance at 12% and Rural finance at 4%.
Margins and asset quality are stable
Margins increased 19bp YoY, despite a declining interest rate scenario due to a
higher share of high-yielding fixed-rate consumer financing business and lower
share of LAP business.
NIM (on AUM) remained largely stable on a YoY basis at 10.9%.
Interestingly, BAF has been reducing the share of bank borrowings. It declined
from 45% in 1QFY17 to 38% now.
27 October 2016
2

Bajaj Finance
Asset quality remained healthy with GNPLs at 1.58% v/s 1.47% in 1QFY17 and
1.67% (150dpd) in 2QFY16. Provision coverage remained more than adequate at
73%. Provisions made during the quarter declined 6% sequentially to INR1.7b
(BAF made an additional provision of INR191m for the mortgage portfolio in
1QFY17).
Other highlights
Number of loans disbursed increased 56% YoY to 2.2m while number of new
customers increased 30% to 0.83m.
Total points of distribution increased from 24,000 at end-FY16 to 33,700 now
Conference call highlights
Growth guidance:
AUM growth in 3QFY17 could taper down marginally as the company pulls back
in CD financing as well as a high base.
70% of retail business coming from existing clients, which depicts the strength of
cross sell franchise.
Businesses:
The Retail EMI business is witnessing good traction. The partnership with Future
group contributes to 30% of business.
BAF is in advanced stages of migration from DSA loan sourcing to own-sourcing.
Mortgage products, now, are primarily sourced in-house. Around 65% of
sourcing in salaried personal loans is in-house (up from 30% one year back).
Management expects this to go to 80% in the next 6-9 months. In addition, 70%
of professional loans are sourced in-house.
In business financing, management is cutting back on exposure to NCR region
due to increased signs of stress. A year ago, BAF disbursed INR600m per month
in NCR. This number has come down to INR250m per month now.
They are looking to introduce a comprehensive payments portfolio with credit
card launched with a business partner as well as an online wallet.
Management is confident of customer addition of 3-4m per year over the next
5-10 years.
Capital Raise:
The company will consider raising capital in 1HCY18
Borrowing:
Cost of funds could decline 10-15bp (without including further MCLR cuts by
banks) over the next few months on account of lower CoF from market
borrowings.
Others:
The company raised INR20b of Tier II capital during the quarter. The acquisition
cost was expensed in the quarter itself.
Rural economy in Maharashtra is soft, while other states are doing fine.
The total securitized book of BAF stands at INR23.45b
LTV in LAP is in the range of 55-65%
27 October 2016
3

Bajaj Finance
Valuation and view
BAF is trading at 5.4x FY18 P/B. In our view premium to peers can be justified
on various counts.
Diversified and de-risked portfolio – A key strength of business model:
BAF has
also ensured that it has a diverse set of growth drivers in the portfolio versus
peers.
A diverse portfolio comprising of profit maximizes and scale builders
helps reduce cyclicality in growth and assets quality.
It’s expertise lies in
detecting early warning signals of stress in particular segments and adjusting the
portfolio accordingly.
Cross Sell expert:
A well-diversified credit portfolio, focus on cross selling,
customer acquisition, and systematic expansion in delivery channels both
physical and virtual, selective distribution of products through these channels
are likely to sustain robust growth in AUM. These, along with its small market
share are likely to help sustain ~30% CAGR in AUM over next 3 years.
Market share gains through customer acquisition and new product launches:
BAF is the largest consumer durables and lifestyle financier in the country and
has been continuously gaining market share in these businesses. Continuous
market share gain and strong distribution has created entry barriers for
competitors. One of the key strengths that BAF has built over time is a quick
turnaround time unmatched by most other retail financiers. Thus, other than
purchases on credit cards of banks, there are very few other competitors that
BAF sees in the consumer durables business, which enables it with pricing
power.
Well managed asset quality and & tested management capabilities:
Despite
lower growth and pressure on asset quality witnessed for peer group; BAF
continues to clock healthy growth and has one of the best asset quality among
the peer group. Management has not only demonstrated its ability to gain
market share in segments, but has been alert to potential asset quality risks as
well. It has withdrawn from certain segments like construction equipment, 3W
financing and slowed down on LAP in a timely manner.
Timely investment in automation and technology:
BAF has been proactive in
making timely investments in technology and automation which over a period of
time will help reducing operating cost and reduce delivery cost.
We value BAF based on residual income model assuming, Rf=7.25%, β=1.2, risk
premium of 5% and terminal growth rate of 4.5%. We expect net profit to grow
at CAGR of 35%+ over FY16-19E and RoEs to cross 25% by FY19E. The stock is
currently trading at 6.6x/5.4x FY17/18E BV. We value the stock at INR1,281
based on RI model, implying a PBV of 5.5x Sep 2018E. Maintain
Buy.
27 October 2016
4

Bajaj Finance
Exhibit 2: Quarterly Snapshot
FY15
1Q
Profit and Loss (INR m)
Total Income
Income from operations
Other Operating Income
Interest Expenses
Net Income
Other Income
Operating Expenses
Employee
Others
Operating Profits
Provisions
PBT
Taxes
Reported PAT
Asset Quality
GNPA (INR m)
NNPA (INR m)
GNPAs(%)
NNPAs(%)
PCR (%)
Ratios (%)
Cost to Income
Tax Rate
CAR
Tier I
RoA (not annualised)
RoE (not annualised)
Key Details (INR m)
AUM
On book Loans
Off book Loans
AUM Mix (%)
Consumer Finance
SME Business
Commercial
Rural
12,436
11,801
635
4,996
7,440
24
3,428
1,078
2,350
4,035
829
3,206
1,092
2,114
2Q
12,322
11,703
620
5,445
6,878
96
3,186
1,059
2,127
3,788
800
2,987
1,016
1,972
3Q
14,766
14,164
601
5,924
8,842
88
3,921
1,198
2,723
5,009
1,079
3,931
1,347
2,584
4Q
14,294
13,532
762
6,118
8,176
156
3,749
1,172
2,577
4,583
1,138
3,446
1,136
2,310
1Q
16,462
15,716
746
6,771
9,692
96
4,531
1,446
3,085
5,257
1,033
4,224
1,468
2,756
2Q
16,799
15,921
878
6,947
9,853
206
4,411
1,498
2,913
5,648
1,368
4,280
1,486
2,794
FY16
3Q
20,614
19,717
897
7,493
13,121
83
5,490
1,705
3,784
7,714
1,462
6,252
2,167
4,085
4Q
19,168
18,212
957
8,058
11,110
406
5,061
1,647
3,414
6,455
1,565
4,890
1,740
3,150
1Q
22,864
21,659
1,205
8,833
14,031
147
5,865
2,018
3,847
8,312
1,797
6,515
2,275
4,240
FY17
2Q
23,470
21,802
1,668
9,562
13,909
190
6,144
2,130
4,014
7,954
1,691
6,263
2,185
4,078
Variation (%)
QoQ
YoY
3
1
38
8
-1
29
5
6
4
-4
-6
-4
-4
-4
40
37
90
38
41
-8
39
42
38
41
24
46
47
46
2,898
692
1.1
0.3
76.0
45.9
34.1
18.0
15.2
0.9
5.1
3,772
1,284
1.4
0.5
67.0
45.7
34.0
19.3
15.1
0.7
4.6
4,429
1,447
1.5
0.5
68.0
43.9
34.3
18.7
14.7
0.9
5.6
4,711
1,404
1.5
0.5
71.0
45.0
33.0
18.0
14.2
0.7
4.8
5,762
1,875
1.7
0.6
68.0
46.3
34.8
20.7
17.4
0.9
4.9
6,098
1,680
1.7
0.5
73.0
43.9
34.7
20.5
17.3
0.8
4.2
5,387
1,086
1.3
0.3
80.0
41.6
34.7
19.5
16.1
1.0
5.8
5,328
1,213
1.2
0.3
77.0
43.9
35.6
19.5
16.1
0.8
4.3
7,045
1,965
1.5
0.4
73.0
41.4
34.9
17.8
14.8
0.9
5.5
7,897
2,149
1.6
0.4
73.0
43.6
34.9
21.5
15.0
0.8
5.1
12
9
30
28
269,430 280,040 308,220 324,100 355,570 379,640 434,520 442,290 496,080 523,320
256,420 267,510 295,280 311,990 340,950 365,150 417,600 433,144 479,230 499,810
13,010 12,530 12,940 12,110 14,620 14,490 16,920 9,146
16,850 23,510
40
53
7
0
40
54
6
1
38
55
6
1
41
48
10
1
42
47
10
1
41
47
10
2
42
44
11
3
43
42
12
3
44
40
12
3
5
4
40
38
37
62
46
39
12
4
Source: Company, MOSL
27 October 2016
5

Bajaj Finance
Story in charts
Exhibit 3: Nos. of loan disb. grew at healthy 56% YoY
Loans Disbursed (Nos '000)
61
29
15 15 (9)
29
59 52
37
25
Growth (%)
40 36
48
56
33
29 33
Exhibit 4: AUM growth continues to remain strong
AUM (INR b)
41
37
37 40
35 32
AUM Gr. (%)
36
41
36
40 38
192 198 225 241 269 280 308 324 356 380 435 442 496 523
Source: MOSL, Company
Source: MOSL, Company
Exhibit 5: Pullback in LAP over the past few quarters
Consumer Finance
9
9
8
8
7
6
SME Business
6
Commercial
Exhibit 6: Cost/income ratio on a downward trajectory
Cost income (%)
47.5
45.9 45.7
45.0
46.3
43.6
10 10 10 11 12 12 12
49 50 52 53 53 54 55 48 47 47 44 42 40 39
42 41 40 39 40 40 38 41 42 41 42 43 44 46
43.9
43.9
41.6
43.9
41.4
Source: MOSL, Company
Source: MOSL, Company
Exhibit 7: NPL performance is best among peers
GNPA (%)
0.5
0.3
0.5
0.5
0.6
0.5
0.4
0.3
0.3
NNPA (%)
0.4
Exhibit 8: Well capitalized
CAR (%)
Tier 1 (%)
1.1
1.4
1.5
1.5
1.7
1.7
1.3
1.2
1.5
1.6
Source: MOSL, Company
Source: MOSL, Company
27 October 2016
6

Bajaj Finance
Exhibit 9:
Financials: Valuation metrics
Rating
66
ICICIBC*
HDFCB
AXSB
KMB*
YES
IIB
IDFC Bk
FB
DCBB
JKBK
SIB
Private Aggregate
SBIN (cons)*
PNB
BOI
BOB
CBK
UNBK
OBC
INBK
ANDB
Public Aggregate
Banks Aggregate
HDFC*
LICHF
IHFL
GRHF
REPCO
DEWH
Housing Finance
RECL
POWF
Infra Finance
SHTF
MMFS
BAF
MUTH
Asset Finance
Buy
Buy
Neutral
Buy
Buy
Buy
Neutral
Buy
Neutral
Neutral
Buy
Buy
Neutral
Neutral
Buy
Neutral
Buy
Neutral
Buy
Buy
CMP
Mcap
EPS (INR)
FY17
17.3
58.5
13.4
26.7
77.4
48.4
3.2
4.6
7.2
-1.8
3.0
14.7
10.8
-10.8
14.1
28.3
22.4
16.7
25.3
1.5
P/E (x)
BV (INR)
P/BV (x)
FY18
1.29
3.23
1.94
3.37
2.68
3.07
1.68
1.49
1.65
0.50
0.72
2.45
1.11
0.71
0.45
0.89
0.60
0.41
0.30
0.67
0.49
0.74
1.53
3.42
2.31
2.69
9.79
3.52
1.40
3.94
0.70
0.74
0.73
1.91
2.79
5.42
1.98
2.02
RoA (%)
FY17
1.13
1.92
0.56
1.63
1.77
1.83
1.18
0.79
0.95
-0.10
0.59
0.47
0.31
-0.16
0.47
0.27
0.37
0.23
0.57
0.08
FY18
1.18
1.94
0.84
1.81
1.84
1.85
1.11
0.80
0.93
0.28
0.62
RoE (%)
FY17
10.5
18.9
6.0
14.2
21.6
15.5
7.8
9.4
11.0
-1.4
10.3
FY18
11.2
19.6
9.9
15.4
23.3
17.0
9.3
10.6
11.9
4.2
11.7
Buy
Buy
Buy
Neutral
Buy
Buy
Neutral
Neutral
Buy
Buy
Buy
Buy
(INR) (USD b)
284
25.0
1,249
47.8
485
17.5
807
22.4
1,254
8.0
1,183
10.7
77
4.0
82
2.1
128
0.6
68
0.5
24
0.5
139.1
255
30.0
142
4.2
114
1.6
153
5.4
315
2.6
144
1.5
130
0.7
218
1.6
56
1.7
49.3
188.4
1,383
33.1
586
4.5
847
5.4
340
1.9
755
0.7
325
1.5
47.1
135
4.0
124
5.0
9.0
1,093
3.8
365
3.1
1,105
1.8
357
2.2
12.7
34.5
39.9
68.1
8.0
30.4
31.4
29.4
24.0
66.9
14.3
34.6
28.0
FY18 FY17
20.0 13.0
70.3 21.4
23.7 36.1
33.1 30.3
100.0 16.2
60.9 24.5
4.1
23.9
5.6
17.7
8.7
17.8
5.6 -38.0
3.6
8.0
23.1
24.3 17.3
12.8 13.1
21.6 -10.6
20.0 10.8
37.5 11.1
39.1
6.4
24.2
7.8
31.4
8.6
6.4
36.4
15.6
20.5
37.8 28.0
49.6 14.7
83.7 12.4
10.1 42.5
39.7 24.8
38.8 10.3
22.3
33.4
4.6
25.5
5.2
4.9
90.2 16.3
17.4 25.6
44.2 31.9
33.6 12.7
14.0
FY18 FY17 FY18 FY17
10.3 145 160 1.49
17.8 332 386 3.76
20.4 230 250 2.11
24.4 208 239 3.89
12.5 389 469 3.22
19.4 333 385 3.56
18.8
43
46
1.81
14.6
51
55
1.61
14.7
69
77
1.86
12.2 130 136 0.52
6.5
30
33
0.79
18.4
2.74
10.5 234 253 1.22
11.1 189 200 0.75
5.3
239 255 0.48
7.7
157 173 0.97
8.4
500 528 0.63
3.7
314 348 0.46
5.4
410 428 0.32
7.0
300 324 0.73
8.7
109 114 0.51
10.1
0.78
15.2
1.66
22.2 194 217 4.33
11.8 213 253 2.75
10.1 280 315 3.02
33.7
28
35 12.07
19.0 180 215 4.20
8.4
202 231 1.61
18.8
4.46
4.0
168 194 0.81
4.9
149 167 0.83
4.5
0.82
12.1 502 573 2.18
21.0 118 131 3.09
25.0 166 204 6.64
10.6 159 180 2.25
11.3
2.28
0.54 7.9 9.5
0.34 5.8 6.6
0.29 -4.6 8.7
0.60 9.3 12.1
0.32 5.8 7.3
0.58 7.4 11.8
0.30 4.2 5.8
0.64 8.7 10.0
0.31 1.4 5.8
1.84
1.51
3.63
2.25
2.15
1.27
1.82
1.55
3.65
2.26
2.20
1.31
19.4
20.3
25.5
31.3
18.3
17.0
19.0
21.3
28.1
32.1
20.1
17.9
2.63 2.54 18.8 18.5
2.37 2.12 16.8 16.2
2.30
1.97
3.48
3.66
2.65
2.10
3.38
3.57
14.1
12.6
22.8
18.7
16.7
14.0
23.9
19.9
*Multiples adj. for value of key ventures/Investments; For ICICI Bank and HDFC Ltd BV is adjusted for investments in subsidiaries
27 October 2016
7

Bajaj Finance
Financials and valuations
Income Statement
Y/E MARCH
Interest Income
Interest Expended
Net Interest Income
Change (%)
Other Operating Income
Other Income
Net Income
Change (%)
Operating Expenses
Operating Income
Change (%)
Provisions and W/Offs
PBT
Tax
Tax Rate (%)
PAT
Change (%)
Proposed Dividend
Balance Sheet
Y/E MARCH
Capital
Reserves & Surplus
Net Worth
Borrowings
Change (%)
Other liabilities & provisions
Total Liabilities
Investments
Change (%)
Advances
Change (%)
Net Fixed Assets
Other assets
Total Assets
E: MOSL Estimates
2012
19,963
7,462
12,501
36.9
1,668
89
14,257
37.7
6,691
7,566
31.7
1,544
6,022
1,958
32.5
4,064
64.6
496
2013
29,248
12,057
17,191
37.5
1,689
177
19,057
33.7
8,523
10,534
39.2
1,818
8,716
2,803
32.2
5,913
45.5
747
2014
37,896
15,732
22,163
28.9
2,429
419
25,011
31.2
11,511
13,500
28.2
2,588
10,912
3,722
34.1
7,190
21.6
802
2015
51,200
22,483
28,717
29.6
2,618
364
31,699
26.7
14,284
17,415
29.0
3,846
13,569
4,591
33.8
8,979
24.9
903
2016
69,566
29,269
40,297
40.3
3,477
792
44,566
40.6
19,492
25,074
44.0
5,429
19,646
6,861
34.9
12,785
42.4
377
2017E
93,352
39,739
53,612
33.0
6,189
901
60,703
36.2
24,598
36,105
44.0
7,589
28,516
9,838
34.5
18,678
46.1
2,335
2018E
122,506
53,325
69,181
29.0
7,737
951
77,869
28.3
30,383
47,486
31.5
10,812
36,674
12,652
34.5
24,021
28.6
3,003
(INR Million)
2019E
160,680
71,187
89,493
29.4
9,284
951
99,728
28.1
36,562
63,166
33.0
13,055
50,111
17,288
34.5
32,823
36.6
4,103
(INR Million)
2019E
1,071
136,652
137,723
900,068
32.0
11,929
1,049,720
13,268
8.0
1,011,312
32.0
2,900
22,240
1,049,720
2012
826
19,509
20,336
102,264
52.4
6,667
129,267
55
-2.3
122,831
68.9
1,388
4,993
129,267
2013
991
32,677
33,668
133,490
30.5
11,051
178,209
53
-4.0
167,440
36.3
1,762
8,957
178,211
2014
995
38,914
39,909
197,496
47.9
8,776
246,180
282
436.3
229,710
37.2
2,199
13,990
246,180
2015
1,003
46,996
47,999
266,908
35.1
13,206
328,112
3,323
1,077.9
311,995
35.8
2,492
10,303
328,112
2016
1,071
72,175
73,246
370,247
38.7
6,903
450,397
10,341
211.2
433,144
38.8
2,870
18,210
464,565
2017E
1,071
88,122
89,193
503,141
35.9
8,284
600,617
11,375
10.0
571,751
32.0
2,880
14,612
600,617
2018E
1,071
108,630
109,701
681,870
35.5
9,941
801,511
12,285
8.0
766,146
34.0
2,890
20,191
801,511
27 October 2016
8

Bajaj Finance
Financials and valuations
Ratios
Y/E MARCH
Spreads Analysis (%)
Yield on Advances
Cost of borrowings
Interest Spread
Net Interest Margin
Profitability Ratios (%)
RoE
RoA
RoA on AUM
Int. Expended/Int.Earned
Secur. Inc./Net Income
Efficiency Ratios (%)
Op. Exps./Net Income
Empl. Cost/Op. Exps.
Asset-Liability Profile (%)
Loans/Borrowings Ratio
Net NPAs to Adv.
CAR
Tier 1
Valuation
Book Value (INR)
Price-BV (x)
Adjusted BV (INR)
Price-ABV (x)
EPS (INR)
EPS Growth (%)
Price-Earnings (x)
OPS (INR)
OPS Growth (%)
Price-OP (x)
Dividend per Share (INR)
Dividend Yield (%)
E: MOSL Estimates
2012
20.4
8.8
11.6
12.2
2013
20.2
10.2
9.9
11.7
2014
19.1
9.5
9.6
10.8
2015
18.9
9.7
9.2
10.4
2016
18.7
9.2
9.5
10.6
2017E
17.7
9.1
8.6
10.4
2018E
17.6
9.0
8.6
10.2
2019E
17.5
9.0
8.5
9.9
24.0
3.8
37.4
11.7
21.9
3.8
3.9
41.2
8.9
19.5
3.4
3.5
41.5
9.7
20.4
3.1
3.2
43.9
8.3
21.1
3.2
3.3
42.1
7.8
23.0
3.5
3.6
42.6
10.2
24.2
3.4
3.5
43.5
9.9
26.5
3.5
3.8
44.3
9.3
46.9
28.4
44.7
28.8
46.0
29.6
45.1
31.6
43.7
32.3
40.5
34.8
39.0
36.1
36.7
36.6
120.1
0.1
17.5
15.0
125.4
0.2
22.0
18.7
116.3
0.3
21.0
18.0
116.9
0.5
18.0
14.2
117.0
0.3
19.5
16.1
113.6
0.4
17.0
14.0
112.4
0.5
17.5
13.0
112.4
0.0
19.5
16.0
49
22.7
48.2
22.9
9.8
45.9
112.3
18.3
16.8
60.3
1.2
0.1
68
16.3
66.8
16.5
11.9
21.3
92.6
21.3
16.1
52.0
1.5
0.1
80
13.8
78
14.2
14.5
21.1
76.5
27.1
27.6
40.7
1.6
0.1
96
11.5
91
12.2
17.9
23.9
61.7
34.7
28.0
31.8
1.8
0.2
137
8.1
133
8.3
23.9
33.4
46.3
46.8
34.8
23.6
2.5
0.2
167
6.6
167
6.6
34.9
46.1
31.7
67.4
44.0
16.4
2.6
0.2
205
5.4
205
5.4
44.9
28.6
24.6
88.7
31.5
12.5
3.3
0.3
257
4.3
257
4.3
61.3
36.6
18.0
118.0
33.0
9.4
4.5
0.4
27 October 2016
9

Bajaj Finance
Corporate profile: Bajaj Finance
Company description
Bajaj Finance is a subsidiary of Bajaj Finserv, which
holds 57% into the company. The company has
transformed itself from a captive auto financier
offering two wheeler loans for Bajaj Auto to a one
of the most successful well diversified retail NBFCs.
The company operates in over ten business
segments across consumer, SME and commercial
businesses and is market leader in consumer
durable and two wheeler financing (18% market
share), lifestyle financing and is a large player in
loan against property segment (15% market share).
Exhibit 11: Shareholding pattern (%)
Sep-16
Promoter
DII
FII
Others
57.4
5.1
19.8
17.8
Jun-16
57.4
5.5
20.1
17.1
Sep-15
57.6
6.3
17.6
18.5
Exhibit 10: Sensex rebased
Exhibit 12: Top holders
Holder Name
Maharashtra Scooters Limited
Government Of Singapore
Smallcap World Fund Inc
% Holding
3.5
2.6
1.1
Note: FII Includes depository receipts
Exhibit 13:
Top management
Name
Rahul Bajaj
Nanoo Pamnani
Sanjiv Bajaj
Rajeev Jain
Anant Damle
Designation
Chairman
Vice Chairman
Vice Chairman
Managing Director
Company Secretary
Exhibit 14: Directors
Name
Rahul Bajaj
Nanoo Pamnani*
Sanjiv Bajaj
Rajeev Jain
D S Mehta*
Dipak Poddar*
Gita Piramal*
*Independent
Name
Omkar Goswami*
Ranjan Sanghi*
D J Balaji Rao*
Rajendra Lakhotia*
Rajiv Bajaj
Madhur Bajaj
Exhibit 15: Auditors
Name
Dalal & Shah LLP
Shyamprasad D Limaye
Type
Statutory
Secretarial Audit
Exhibit 16: MOSL forecast v/s consensus
EPS
(INR)
FY17
FY18
MOSL
forecast
34.9
44.9
Consensus
forecast
33.0
43.1
Variation
(%)
5.8
4.1
27 October 2016
10

Bajaj Finance
NOTES
27 October 2016
11

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BAJAJ FINANCE
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