Rupee notes being counted. (Photographer: Dhiraj Singh/Bloomberg)

Q3 Results: Bajaj Finance’s Profit Meets Estimates, Asset Quality Worsens

Bajaj Finance Ltd.’s quarterly profit met estimates even as the non-banking lender’s asset quality worsened.

Net profit rose 48 percent year-on-year to Rs 1,023 crore in the quarter ended December, the Pune-based non-bank lender said in an exchange filing today. That compares with the Rs 990-crore consensus estimate of analysts tracked by Bloomberg.

Net interest income, or the core income from operations, rose 42 percent on a yearly basis to Rs 3,094 crore in the three months ended December.

Gross bad loans ratio rose to 1.55 percent from 1.49 percent in the previous quarter. The net non-performing assets ratio rose to 0.62 percent from 0.53 percent sequentially.

"Over 40 percent is a very strong (profit) growth," said Mahantesh Sabarad, head of Retail Research at SBICAP Securities, in an interview with BloombergQuint. "The market share is shifting in favour of the stronger NBFCs who have good quality money in terms of cost (of funds)."

Managing Director Rajeev Jain said a deterioration in the company’s bad loans was due to its exposure to Infrastructure Leasing & Financial Services group disclosed in the previous quarter. “The only issue was the IL&FS account of Rs 225 crore which slipped into non-performing assets category," Jain told BloombergQuint in an interaction, adding the company had no other exposure to any risky commercial paper.

Other Highlights

  • Assets under management rose 26 percent to Rs 96,248 crore.
  • Loan losses and provisions stood at Rs 448 crore.
  • New loans booked increased 49 percent.
  • Provisioning coverage ratio was 60 percent.
  • Commercial lending grew 28 percent.
  • Rural lending shot up 73 percent.

Shares of Bajaj Finance Ltd. rose nearly 1.6 percent after the earnings announcement compared with a 0.47 percent fall in the NSE Nifty 50 Index.

Watch the full interview here:

Also read: BQEdge | Why You Should Keep An Eye On Bajaj Finance Today