Bajaj Finance: Growth, asset quality issues resurface after a long hiatus

Management is tightening its underwriting practices in select segments of lending as a measure of prudence, which may dent growth in the coming quarters

Even as the liquidity crisis broke out last September, the conviction on Bajaj Finance stock remained high. Despite its expensive valuations, investors were willing to pay as the company assured squeaky clean asset quality and strong growth. That faith was put to test in June quarter (Q1), which brought the Bajaj Finance stock down by 4 per cent post results on Thursday. This is the worst post-results reaction displayed by the stock after the demonetisation phase.

On broad parameters such as net interest income (NII) or net profit growth, the consumer financier didn't falter much. Consolidated NII and net profit