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Informist, Tuesday, Oct. 22, 2024

 

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--Bajaj Finance Jul-Sept consol net profit INR 40 bln
--Analysts saw Bajaj Finance Jul-Sept consol net profit INR 46.08 bln
--Bajaj Finance Jul-Sept consol net profit INR 40.00 bln vs INR 35.51 bln
--Bajaj Finance Jul-Sept consol revenue INR 170.90 bln vs INR 133.82 bln
--Bajaj Finance Apr-Sept consol net profit INR 79.12 bln vs INR 69.88 bln
--Bajaj Finance Apr-Sept consol revenue INR 331.89 bln vs INR 258.80 bln
--Bajaj Finance consol net NPA ratio at 0.46% as on Sept 30
--Bajaj Finance consol gross NPA ratio at 1.06% as on Sept 30
--Bajaj Finance consol AUM INR 3.74 tln as on Sept 30
--Bajaj Finance Jul-Sept net interest income INR 88.38 bln, up 23% on year
 

 

By Siddharth Upasani

 

NEW DELHI – Bajaj Finance Ltd. posted a consolidated net profit of INR 40.14 billion for Jul-Sept, a 13% increase from last year, missing analysts’ estimate of INR 46.08 billion amid deterioration in asset quality. The company also reported an exceptional gain of INR 25.44 billion from the sale of shares of its subsidiary, Bajaj Housing Finance Ltd., during the quarter. On a standalone basis, the non-banking finance company's bottom line stood at INR 56.14 billion, with a tax expense of INR 15.77 billion.

 

Analysts' estimates for Bajaj Finance's quarterly profit were in a wide range due to the presence of the one-off item. The initial public offering of the housing finance subsidiary, which saw INR 65.60 billion being raised, was concluded last month, with Bajaj Housing Finance's shares being listed on Sept. 16.

 

Calling it a "mixed quarter", Bajaj Finance said in its investor presentation that while volumes, assets under management, and operating efficiencies were the positives in Jul-Sept, loan losses remained elevated, leading to muted profit growth. In Jul-Sept, Bajaj Finance's assets under management increased by INR 197.32 billion to stand at INR 3.74 trillion as of Sept. 30, up 29% on year as 9.69 million new loans and 3.98 million new customers were added. As a result, net interest income registered a growth of 23% to INR 88.38 billion.

 

However, the gross non-performing ratio increased to 1.06% as of Sept. 30 from 0.91% a year ago, while net NPAs rose to 0.46% from 0.31%. Loan losses and provisions during the reporting quarter rose 77% on year to INR 19.09 billion, with stage 2 and stage 3 loans--those that are overdue by 31-89 days and more than 90 days, respectively--increasing by INR 5.42 billion on a net basis.

 

"This increase was across all retail and SME (small and medium enterprises) lines of businesses. Company continues to take risk actions by cutting segments and pruning exposures," Bajaj Finance said in its investor presentation.

 

"The Company's leverage analysis basis June 2024 bureau data suggests that customers having 3 or more live unsecured loans are showing higher propensity to default and lower collection efficiencies. The Company is further tightening its underwriting norms for such customers across all products," it added.

 

Indian lenders across the board are seeing increasing stress in their retail books, with Moody's Ratings saying earlier Tuesday that asset quality for the segment is set to worsen over the next couple of years.

 

Jul-Sept also saw Bajaj Finance's cost of funds rising by 3 basis points sequentially to 7.97%. According to the non-bank lender, funding costs peaked last quarter.

 

Among the subsidiaries, Bajaj Housing Finance's home loan assets under management grew by 24%, with net interest income up 13% at INR 7.13 billion as profit after tax rose 21% to INR 5.46 billion. Bajaj Financial Securities Ltd., meanwhile, saw its margin trading facility assets under management more than double on year to INR 54.30 billion in Jul-Sept. Shares of Bajaj Finance ended 1.5% lower Tuesday at INR 6,677.90 on the National Stock Exchange.  End

 

Edited by Rajeev Pai

 

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