Bajaj Finance Q2 Review - Visible Traction On Digital Platform, Omnichannel Strategy: Motilal Oswal
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Motilal Oswal Report
Bajaj Finance Ltd.'s profit after tax was up 53% YoY and 48% QoQ to Rs 14.8b (8% miss) in Q2 FY22. While net interest income at Rs 42.9 billion (10% beat) was up 26% YoY due to higher interest income from surplus liquidity and from IPO financing, it was mitigated by higher operating expense (up 48% QoQ and 40% above our estimate).
Bajaj Finance's credit costs stood at Rs 13 billion (our estimate: Rs 11 billion), which included additional Covid-19 provisions of Rs 3.5 billion in Q2 FY22 to guard against contingencies from a potential third wave.
Gross non performing loan ratio/provision coverage ratio improved by ~50 bps/~400 bps QoQ to 2.45%/55%. The majority of restructuring was in mortgages in Q2 FY22.
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