Q1 Results: Bajaj Finance Profit Jumps, Asset Quality Stable

Bajaj Finance Ltd.'s profit matched street estimates on higher interest income and stable asset quality.

The company's net profit rose 81 percent year-on-year to Rs 835.9 crore for the three-month period ending June, the non-banking finance company said in an exchange filing today. That compares to Rs 841 crore estimated by analysts tracked by Bloomberg.

The year-ago earnings numbers may have been revised as the company adopted Ind-AS standards. The increase in net profit was 69 percent without the adjustment.

This could also be the reason for the stock's initial knee-jerk reaction to the earnings. Shares of the Pune-based non-bank lender dropped as much as 5.3 percent to Rs 2,357 apiece before recovering most of their losses.

Net interest income rose 46 percent to Rs 2,578 crore, as compared to Rs 2,650 crore estimated by Bloomberg. Gross non-performing assets stood at 1.39 percent, while net NPA was at 0.44 percent during the reported period.

Other Key Highlights

• Assets under management grew 35 percent.
• Loan losses and provisions for the quarter stood at Rs 327 crore as against Rs 305 crore year-on-year.
• New loans booked increased by 49 percent YoY.
• Gross non-performing assets at 1.39 percent versus 1.48 percent, sequentially.
• Net NPA at 0.44 percent versus 0.38 percent, sequentially.
• Provisioning coverage ratio stood at 69 percent.