Bajaj Finance: Investors should await clarity on moratorium, asset quality

Some analysts are still cautious on asset quality

While business growth is an important metric, the Street’s reaction to Bajaj Finance’s June 2020 quarter (Q1) update, announced on Monday after market hours, indicates that investors are more concerned about the lender’s asset quality during the pandemic. 

Despite a muted business performance in Q1, shares of Bajaj Finance gained almost 8 per cent on Tuesday to emerge as the top Sensex gainer. The gains are largely because of a sharp reduction in the firm’s moratorium book, which has a direct impact on asset quality and earnings.

According to the Q1 update, Bajaj Finance’s assets under management (AUM) under moratorium fell to