Results Update Q4FY23- Bajaj Finserv, Tech Mahindra & Axis Bank

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Bajaj Finserv

Key Highlights

Consolidated Q4FY23 vs Q4FY22:

• Total income: Rs 23,625 crore vs. Rs 18,862 crore, up 25%.
• Profit after tax: Rs 1,769 crore vs. Rs 1,346 crore, up 31%.
• Bajaj Finance, profit after tax: Rs 3,158 crore vs. Rs 2,420 crore, up 30%.
• General insurance, profit after tax: Rs 322 crore vs. Rs 248 crore, up 30%.
• Life insurance, shareholder’s profit after tax: Rs 415 crore vs. Rs 308 crore, up 35%.

Our Take

Bajaj Finserv continues to deliver growth every quarter and has a strong contribution coming from the lending, general, and life insurance businesses. For investors looking at a strong bank financial company, Bajaj Finserv can be considered for investment as part of one’s core portfolio.

Tech Mahindra

Key Highlights

Q4FY23 (USD):

• Revenue at USD 1,668 million, flat QoQ, up 3.7% YoY.
• Revenue growth of 0.3% QoQ in constant currency terms.
• EBITDA at USD 245 million; down 5.7% QoQ, down 11.0% YoY; margin at 14.7%; down 90bps QoQ.
• Profit after tax (PAT) at USD 136 million, down 13.7% QoQ, down 31.6% YoY.
• Free cash flow at USD 142 million, conversion to PAT at 104%.

Q4FY23 (INR):

• Revenue at Rs 13,718 crore; down 0.1% QoQ, up 13.2% YoY.
• EBITDA at Rs 2,021 crore; down 5.7% QoQ, down 3.2% YoY.
• Consolidated PAT at Rs 1,118 crore; down 13.8% QoQ, down 25.8% YoY.
• Earnings per share (EPS) was at Rs 12.62.

Management Speak

CP Gurnani, Managing Director & Chief Executive Officer, Tech Mahindra, said, “As we step into FY24, we see the increasing need for businesses to stay agile by leveraging next-generation technologies. We are strongly focused on helping our customers stay competitively dominant and relevant in the era of fast-evolving market conditions by helping them adapt to leaner and sustainable business models”.

Rohit Anand, Chief Financial Officer, Tech Mahindra, said, “Our strategy of prudence and operational excellence helped us through the uncertainties of FY23. We continue to return cash to shareholders through a consistent dividend policy. We move into the next fiscal, with sharper focus on productivity improvements, cash & value creation for our stakeholders”.

Our Take

Tech Mahindra is among the top five IT services in the country. Like other top tier IT services companies, the results have been below expectations. Currently our view is that the mid size IT companies offer better investment opportunities to investors as compared to the large ones.

Axis Bank 

Key Highlights

• Net Interest Income up 33% YoY and 2% QoQ, Net Interest Margin at 4.22%, up 73 bps YoY.
• Fee up 24% YoY and 14% QoQ, Core Operating profit up 46% YoY and 3% QoQ.
• CASA grew 21% YoY and 18% QoQ, CASA ratio stood at 47%, up 215 bps YoY and 261 bps QoQ.
• GNPA% at 2.02% declined by 80 bps YoY & 36 bps QoQ, NNPA% at 0.39% declined by 34 bps YoY & 8 bps QoQ.
• Domestic advances are up 23% YoY, 13% QoQ.
• SME up 23% YoY, 13% QoQ, Domestic Corporate up 24% YoY, 11% QoQ and Retail up 22% YoY, 14% QoQ.

Management Speak

Amitabh Chaudhry, MD & CEO, Axis Bank said “With the acquisition of Citibank India Consumer Business, we welcomed over 2.4 million new customers and ~3200 employees to the Axis family. The deal bolsters our market presence, especially in the growth of our premium market share across wealth and cards. We are working on the synergies, some of which are already yielding favorable outcomes. During the quarter, we also made significant progress on Bharat Banking and Digital, two of our priority areas. Overall, we closed the year with a strong sense of purpose and meaningful strides towards building a strong, sustainable franchise.”

Our Take

Among the private sector banks in India, Axis is a well managed bank and has historically maintained low levels of NPAs. Another factor that is likely to help the bank further is the acquisition of Citibank’s consumer business and non-banking financial company (NBFC).

ABOUT THE AUTHOR

Ketan Sonalkar (SEBI Rgn No INA000011255 )

Ketan Sonalkar is a certified SEBI registered investment advisor and head of research at Univest. He is one of the finest financial trainers, with a track record of having trained more than 2000 people in offline and online models. He serves as a consultant advisor to leading fintech and financial data firms. He has over 15 years of working experience in the finance field. He runs Advisory Services for Direct Equities and Personal Finance Transformation.

Note – This channel is for educational and training purpose only & any stock mentioned here should not be taken as a tip/recommendation/advice

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