Bajaj Finance Q4 Results: Net Profit Rises 42%
Bajaj Finance Ltd. saw its consolidated net profit rise sharply in the fourth quarter over a year ago even as core income remainedo subdued.
Net profit rose 42% to Rs 1,347 crore in the January-March period from Rs 948 crore a year ago, as per its exchange filing. The reported net profit was lower than the Rs 1,370.5-crore consensus estimate of analysts tracked by Bloomberg.
Net interest income fell 2.4% to Rs 4,569 crore at the end of the March quarter, compared to Rs 4,684 crore a year ago.
Bajaj Finance’s gross non-performing asset ratio as on Mar. 31 stood at 1.79% compared with 2.86% pro forma gross NPA as on Dec. 31, while its net non-performing assets rose to 0.75% of its total advances, compared to pro forma net NPA of 1.22% in the preceding quarter.
Loan loss provisions in the fourth quarter stood at Rs 1,231 crore, down 37% year-on-year from Rs 1,954 crore.
- Non overdue one-time restructuring book stood at Rs 1,739 crore. This includes secured exposures of Rs 918 crore, one large B2B retailer account of Rs 397 crore and Rs 424 crore of unsecured assets.
- The bounce rates of new origination across businesses are in line or better than pre-Covid origination.
- The auto finance business had the highest gross NPA ratio at 9.3%.
Commenting on the second wave of Covid infection and its impact on business, Bajaj Finance said that disruption in Q1 FY22 could be reasonably mitigated in subsequent quarters.
Despite significant disruptions, the company remains open for business across geographies in line with local administration advisories. As a high frequency indicator, in the last 7-10 days, the company has continued to originate 50-55% of daily volumes in B2B business, 80-85% in B2C and SME businesses and 40-50% in mortgages.Bajaj Finance Investor Presentation
Consolidated assets under management rose 7% to Rs 1.53 lakh crore at the end of the March quarter from Rs 1.43 lakh crore in the preceding three months. A year ago, assets under management were lower at Rs 1.47 lakh crore.
Bajaj Finance owns a 100% stake in Bajaj Housing Finance Ltd. and Bajaj Financial Securities Ltd., which are considered in the consolidated assets under management.
According to the company’s investor presentation:
- 5.47 million new loans were booked in Q4 FY21 as against 6.03 million a year ago.
- New loans origination across businesses, except auto finance, is back to pre-Covid levels. New wallet loans remain in abeyance while selective lending is taking place in the retail EMI business.
Capital & Liquidity
Bajaj Finance said it remains comfortable in terms of capital and liquidity.
- Capital adequacy was at 28.34% as of 31 March 2021. Tier-1 capital was 25.10%.
- Cost of funds for Q4 FY21 was 7.39% vs 8.37% in Q4 FY20.
- Liquidity buffer of Rs 16,485 crore has been maintained as of 31 March 2021. This represents 12.5% of its total borrowing.
- Bajaj Finance has paid down over Rs 7,500 crore to various banks in last two quarters to reduce cost of funds.
- Deposits book stood at Rs 25,803 crore, a growth of 20% year-on-year. Its contribution to consolidated balance sheet was 20% as of 31 March 2021.