Bajaj Finance Q4 Results: Net Profit Up 80% On Higher Income
Bajaj Finance reports a sharp jump in profit on stronger income, lower base.
Bajaj Finance Ltd.’s net profit rose in the fourth quarter on higher income and a low base.
The consumer-focused non-bank lender's profit after tax rose 80% over the preceding year to Rs 2,419.5 crore in the January-March period, according to its exchange filing. That compares with the Rs 2,438-crore consensus estimate of analysts tracked by Bloomberg.
Consolidated total income stood at Rs 8,630 crore, up 26% year-on-year.
The lender’s assets under management increased 29% over the year ago to Rs 1.97 lakh crore. In the fourth quarter, the company booked 62.8 lakh new loans as against 54.7 lakh a year ago.
The non-bank lender's deposits book grew by 19% over a year ago to Rs 30,800 crore as of March 31, 2022.
Asset quality improved, too.
Gross non-performing assets ratio fell 13 basis points sequentially to 1.60%. Net NPAs fell 10 basis points quarter-on-quarter to 0.68%.
Loan Growth
The lender saw traction across a number of key segments.
Mortgages, which makes up the largest share of the consolidated loan book, saw an increase of 24% year-on-year. Consumer lending grew 27% while the small business lending portfolio rose 24%.
The only segment that saw a contraction was auto finance, where the loan book contracted 16% over a year ago.
Asset Quality
Bajaj Finance has seen a normalisation of stressed loan ratios across most segments barring auto finance.
The gross NPA ratio for the auto finance book remains at over 11%. For the mortgages business, which its the largest segment, bad loans are at 0.86%.
Payments, Digital Strategy
Bajaj Finance will launch its planned super app on May 1, the management said during an earnings conference call. Alongside the company will build out a new web platform to be rolled out over the course of the year.
Digital origination of loans and credit products is already a large part of the company's strategy. It booked 4.5 lakh new EMI card customers digitally during the fourth quarter, it said in an investor presentation. Cards in force of EMI cards acquired digitally now stands at 18 lakh. In the fourth quarter, this delivered 2.34 lakh loans, the presentation added.
The lender's digital platforms delivered Rs 1,800 crore in personal loans and 29,000 cards for the credit card distribution business, the company said.
Bajaj Finance has significantly accelerated its investments in building a full-service payments business across issuance and acquiring, it said. It has created a strategic business unit for payments to accelerate payments initiatives.
In FY23, the company has plans to launch peer-to-peer, electronic data capture and payment gateway businesses on its own or through strategic partnerships. The company has set aside deep investments to grow payments business, it added.