Bajaj Finance, a provider of consumer finance, SME finance, commercial lending and wealth management services, reported a 42% year-on-year jump in its net profit to Rs 602 crore for the first quarter of 2017-1
Bajaj Finance, a provider of consumer finance, SME finance, commercial lending and wealth management services, reported a 42% year-on-year jump in its net profit to Rs 602 crore for the first quarter of 2017-18 on the back of a strong growth in all its businesses, sending its shares to a record high of Rs 1,577.85. The scrip closed at Rs1,543, up 2% from its previous close.
The Pune-based non-banking finance company’s board okayed, subject to the approval of shareholders, issue of shares of up to Rs 4,500 crore through qualified institutional placements to qualified institutional buyers to fund future growth plans. The proposed issue will dilute the promoter’s stake in the company by 3% to 54.5%, it said.
For the April-June quarter, Bajaj Finance’s total income grew 38.7% from the year-ago period to Rs 3,165 crore. The net interest income stood at Rs 2,087 crore, up 49.20% from the corresponding period a year-ago.
Provisions for bad loans increased to Rs286 crore from Rs180 crore a year-ago. However, on a sequential basis, provisions reduced marginally from `289 crore. During the quarter, it took an additional charge of Rs 42 crore for its consumer and infrastructure finance businesses.
Bajaj Finance said its gross non-performing assets stood at 1.7%, up 23 basis points from the year-ago period, and up by 2 basis points sequentially. Net NPAs grew by 12 basis points year-on-year to 0.53%. In the previous quarter, it stood at 0.44%.
Adhering to RBI guidelines, the company changed its NPA recognition policy from 120-day overdue to 90-day overdue. The comparable gross and net NPAs at 120 days stood at 1.44% and 0.42%, respectively.
“We have begun Q1 on a strong footing and we have seen growth in all the important lines of our business,” said MD Rajeev Jain.
During the quarter, new loans grew by 48% to Rs 37,71,392 , while assets under management increased by 39% to `68,883 crore. The company’s deposit book stood at `5,095 crore as of 30 June 2017, which is 10% of its overall borrowings book.
Bajaj Finance’s consumer loans segment grew 43% to `31,468 crore. The commercial segment saw a 68% jump to `10,089 crore with new offerings such as developer finance, IPO financing and warehouse receipt financing, Jain said. The company also saw a surge in the consumer electronics segment, where prices are expected to go up after the implementation of the GST.