Bundles of Indian twenty rupee banknotes (Photographer: Dhiraj Singh/Bloomberg) 

Q2 Results: Bajaj Finance’s Profit Meets Estimates, Asset Quality Weakens

Bajaj Finance Ltd.’s quarterly profit rose in line with analysts’ estimates even as the financial services provider’s asset quality deteriorated.

Net profit rose 54 percent year-on-year to Rs 923 crore in the quarter ended September, the Pune-based company said in an exchange filing today. That compares with the Rs 858-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 2,729 crore in the three months ended September.

Gross bad loans during the period rose to 1.49 percent from 1.39 percent in the previous quarter. The ratio of net bad loans rose to 0.53 percent from 0.44 percent sequentially.

Meanwhile, the company’s Managing Director Rajeev Jain downplayed the prevailing liquidity crisis in the sector. “We’re committed to deliver 25-27 percent balance sheet growth and that stance is not changing even in the short-term," Jain told BloombergQuint. “Given our strong financials and funding profiles, we can grow while conserving liquidity.

Other Highlights

  • Assets under management rose 38 percent to Rs 10,217 crore.
  • Loan losses and provisions stood at Rs 315 crore.
  • New loans booked increased 63 percent.
  • Provisioning coverage ratio stood at 65 percent.
  • Commercial lending grew 38 percent.
  • Rural lending grew 71 percent.

Shares of the company fell close to 4 percent to Rs 2,033 apiece after the earnings announcement.

Watch Rajeev Jain’s interview here