Bajaj Finance Ltd shares have tumbled 5.21 per cent after the company estimates that its gross and net non-performing assets (NNPA) could be higher in Q1 and Q2 of FY22. Bajaj Finance was trading at Rs 5,725.75, down 4.47 per cent from its previous close, while the benchmark index, Sensex gained 0.14 per cent to 52,172.66.

“It had a good Q4 with most financial indicators normalizing to pre-covid levels. The company ended FY21 with GNPA of 1.8 per cent and NNPA of 0.75 per cent, close to pre-covid levels. The company remained prudent on provisioning and carried an additional provision of Rs 840 crore as of 31 March 2021,” the company said in a release.

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Analysts at HDFC Securities said even after a downward revision of FY22 earnings to 9.1 per cent, it still remains an enviably profitable franchise with high growth. However, less than 20 per cent run-up in the stock since its Q4FY21 earnings is building in ambitious expectations around growth and profitability, which calls for a reality check in light of the company’s profit warning. The brokerage has downgraded the stock to reduce.
However, given the severity of the second wave and the consequent lockdown across most of India for last 35 days, the NBFC offered an update of its estimated impact on the company’s financials in FY22. The company said it remains open for business across all categories aided by stable EMI bounce rates in Q1FY22.