Financials in focus; Bajaj Finance, M&M Financial, Bandhan Bank up over 5%

MAS Financial, Ujjivan Financial, HUDCO, Cholamandalam Investment, Aditya Birla Money, Geojit Financial, AU SFB, and CreditAccess Grameen were up in the range of 5 per cent to 9 per cent on the BSE.

Shares of financial firms, mainly non-banking financial companies (NBFC) were in focus on Tuesday. The stocks rallied up to 20 per cent on the BSE after Bajaj Finance said its assets under management (AUM) under moratorium declined from 27 per cent, at the end of April 2020, to about 15.5 per cent at the end of June 2020. Bandhan Bank has reported healthy loan and deposit growth in the April-June quarter on a yearly basis despite nationwide Covid-19-induced lockdown.

The stock of Bajaj Finance rallied 8 per cent to Rs 3,348 in intra-day trade, zooming 40 per cent in the past one month. Bandhan Bank surged 6 per cent to Rs 381, gaining 54 per in the past one month on the BSE. In comparison, the S&P BSE Sensex was up nearly 7 per cent during the month.

As economic activity picks up in India, analysts are seeing steady improvement in collection trends. Bandhan Bank’s, collection efficiency has improved to 70 per cent for micro banking in June 2020 (30 per cent micro-banking moratorium book). In terms of non-micro banking, collection efficiency for June 2020 was at 84 per cent (16 per cent non-micro moratorium book).

“The slowdown in advance momentum was in line with expectation amid lockdown. However, a sharp improvement in collection efficiency to around 30 per cent in micro banking is a strong positive,” ICICI Securities said in a note.

“The sharp deceleration of Bajaj Finance’s in advance momentum and slowdown in the pace of customer addition was anticipated amid lockdown in the first two months of Q1FY21. The decline in moratorium remains positive and has been factored in the recent run-up in stock price. The management indicated at the continuance of accelerated provisioning in Q1FY21E, which could keep profitability benign,” the brokerage firm said.

Among others, Ujjivan Small Finance Bank was locked in the upper circuit of 20 per cent at Rs 37 with only buyers were seen on the counter. The trading volumes jumped an over 15-fold with a combined 18.3 million shares changing hands on the NSE and BSE till 02.30 pm. There were pending buy orders for around 800,000 shares on both the exchanges.

Equitas Holdings was, too, locked in the upper circuit of 10 per cent at Rs 58.70, while Mahindra & Mahindra Financial Services surged 10 per cent to Rs 201 on the BSE.

MAS Financial Services, Ujjivan Financial Services, Housing and Urban Development Corporation (HUDCO), IDFC, Cholamandalam Investment and Finance Company, Aditya Birla Money, Geojit Financial Services, AU Small Finance Bank and CreditAccess Grameen were up in the range of 5 per cent to 9 per cent on the BSE.

Currently, the S&P BSE Finance index, the top gainer among sectoral indices, was up 1.6 per cent, as compared to a 0.25 per cent rise in the S&P BSE Sensex.