SBI surpasses Bajaj Finance in m-cap ranking as stock hits new high

State Bank of India (SBI) surpassed Bajaj Finance in market capitalisation (m-cap) ranking as the stock of the public sector bank hit a new high on Wednesday. The scrip of the non-banking finance company (NBFC), meanwhile, declined over 4 per cent on the BSE in today's intra-day trade.

At 01:21 pm, SBI stood at number eighth position in the overall ranking with an m-cap of Rs 467,203 crore, while Bajaj Finance slipped to number ninth position with a market cap of Rs 453,674 crore, BSE data shows. In the past one month, SBI has rallied 18 per cent, while Bajaj Finance has declined 3.6 per cent. In comparison, the S&P BSE Sensex was up 2.3 per cent during the period. On August 13, 2021, SBI had a market cap of Rs 384,963 crore and Bajaj Finance of Rs 384,873 crore, data shows.

Today, shares of Bajaj Finance declined nearly 5 per cent to Rs 7,484 in the intra-day trade on profit booking after it posted a strong net interest income (NII) growth of 28 per cent year-on-year (YoY) at Rs 5,335 crore for the quarter ended September 2021 (Q2FY22). The stock of Bajaj Finance had hit a record high of Rs 8,020 on October 18, 2021.

Consolidated post tax profit for Q2FY22 was Rs 1,481 crore compared to Rs 965 crore in Q2FY21, a growth of 53 per cent YoY. Gross non-performing assets (NPA) and net NPA ratio moderated to 2.45 per cent and 1.10 per cent, respectively, from Q1FY22 levels of 2.96 per cent and 1.46 per cent post Rs 340 crore write off.

"Despite the slightly higher credit costs and elevated operating expenses, Q2FY22 was a decent quarter for Bajaj Finance. Customer acquisitions and new loans booked have not reached record highs, but have convincingly scaled back to pre-Covid levels. We expect Bajaj Finance to be able to deliver a quarterly run-rate in AUM growth similar to pre-Covid levels in H2FY22," Motilal Oswal Financial Services said in a results update.

Meanwhile, the stock of SBI hit a new high of Rs 526.70, up 2.8 per cent. The board of directors of the Bank is scheduled to meet on November 3, 2021 to consider the financial results of Q2FY22.

SBI appears well-positioned to report a strong uptick in earnings, led by moderation in credit costs, as the bank has strengthened its balance sheet and increased its PCR to around 86 per cent, according to analysts.

"We like SBI among PSBs for its strong liability profile, high retail orientation, reasonable capital position, and sharply improving RoA/RoRWA/RoE, given renewed focus on profitability while maintaining market dominance and portfolio quality," analysts at Emkay Global Financial Services said in June quarter results update.

On October 6, 2021 Moody's Investors Service (Moody’s) affirmed the long-term local and foreign current deposit ratings of SBI at Baa3. At the same time, their rating outlooks have been changed to stable from negative. This rating action is driven by Moody's recent affirmation of the Indian government's Baa3 issuer rating and change in outlook to stable from negative, the rating agency said rating action.