Mehabe score: 5 G Factor: 2 Piotski Score: 5 The stock has a rating OBSERVE & HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 2 and Piotski score of 5.
Description
Bajaj Finserv is primarily engaged in the business of promoting financial services such as finance, insurance, wealth management, etc. through its investments in subsidiaries and joint ventures. The Company is also engaged in the business of generating power through wind turbines, a renewable source of energy.(Source : 202003-01 Annual Report Page No:254)Site:BAJAJFINSVMain Symbol:BAJAJFINSV
Stock trades at 18012.0, above its 50dma 15929.02. It also trades above its 200dma 12350.09. The stock remains bullish on techicals
The 52 week high is at 18813.80 and the 52week low is at 5511.05
Price Chart
P/E Chart
Sales and Margin
Strengths
– has delivered good profit growth of 19.14% CAGR over last 5 years
-‘s median sales growth is 27.57% of last 10 years
Weakness
– Stock is trading at 8.00 times its book value
– has a low return on equity of 13.30% for last 3 years.
Competition
– The industry trades at a mean P/E of 23.3x. SBI Cards trades at the industry’s max P/E of 119.64x. BAJAJFINSV trades at a P/E of 70.1x
– Industry’s mean G-Factor is 3.1 while the mean Piotski score is 6.0. BAJAJFINSV has a G-Factor of 2 and Piotski scoreof 5.
– Average 1 month return for industry is 2.5%. The max 1- month return was given by Cholaman.Inv.&Fn: a return of 12.39 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 13949.0 cr compared to Rs 14190.0 cr for period ended Jun 2020, a fall of 1.7%
Operating Profits reported at Rs 4090.0 cr for period ended Jun 2021 vis-vis 5087.0 for period ended Jun 2020 .
Operating Margins contracted -652.8 bps for period ended Jun 2021 vis-vis Jun 2020 .
The EPS for Jun 2021 was Rs 52.33 compared to Rs 61.52 for previous quarter ended Mar 2021 and Rs 76.36 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 60344.0 cr for period ended TTM vis-vis sales of Rs 60592.0 cr for the period ended Mar 2021, a fall of 0.4%. The 3 year sales cagr stood at 12.3%.
Operating margins shrank to 31.0% for period ended TTM vis-vis 32.0% for period ended Mar 2021, contraction of 100.0 bps.
Net Profit reported at Rs 4088.0 cr for period ended TTM vis-vis sales of Rs 4470.0 cr for the period ended Mar 2021, falling 9.3%.
Company recorded a Net Profit CAGR of 8.3% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 4547.0 cr for period ended Mar 2021 vis-vis Rs -23369.0 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 13.0% compared to 13.0% over the last 3 Years. – The stock has given a return of 219% on a 1 Year basis vis-vis a return of 49% over the last 3 Years. – The compounded sales growth on a TTM bassis is 7% vis-vis a compounded sales growth of 23% over the last 3 Years. – The compounded profit growth on a TTM basis is 9% vis-vis a compounded profit growth of 19% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Sep 2021 fii holding stood at 8.92% vis-vis 9.55% for Jun 2021 – Public shareholding has remained largely constant. The Sep 2021 public holding stood at 23.5% vis-vis 23.49% for Jun 2021
Conclusion
– has delivered good profit growth of 19.14% CAGR over last 5 years
-‘s median sales growth is 27.57% of last 10 years – Stock is trading at 8.00 times its book value
– has a low return on equity of 13.30% for last 3 years.
Fundamentally, the stock remains weak on business fundamentals. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock trades above its 50 DMA 15929.02 and is trading at 18012.0 It has shown near term bullish momentum contrary to business fundamentals. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
