Bajaj Finance on Wednesday reported a staggering 159% increase in its net profit to Rs 2,596 crore for the three months ended June. Sequentially, the profit rose 7.3%. The company had posted a net profit of Rs 1,002 crore in the year-ago period.
The NBFC’s net interest income came in at Rs 6,638 crore, up 48% YoY, ahead of the Street expectations.
Analysts said the lender earned good yields and attributed this to mortgages and consumer loans. Pre-provisioning operating profit increased 36.6% YoY and 7.3% sequentially to Rs 4,250 crore.
The Bajaj Finance stock closed at Rs 6,408, up 2.29%, on the BSE.
Managing director Rajeev Jain provided a guidance for growth on reaching the Rs 2-trillion AUM milestone. “Bajaj Finance is poised to achieve an AUM of Rs 4 trillion in the next three years,” Jain said. It had taken 15 years to reach Rs 2 trillion and will be Rs 4 trillion in 18 years – that is the power of compounding, he added. Jain said the focus of the management would be profit first and growth second.
The managing director said Bajaj Finance is aiming to to be an omnipresent financial services company dominant across physical, app, web, social, and eventually virtual. It will become fully digital by the end of this fiscal and the goal is to respond to customers’ needs in 5-30 minutes. The company will soon have its own payment gateway and will be deploying PoS terminals. It would have a full payment stack with UPI and bill pay functionality. Speaking at the AGM on Wednesday, Jain said the company had made significant investments for this in FY22.
The asset quality improved with the gross NPA coming in at 1.25%, compared with 1.6% in the March quarter and 2.96% in the year-ago period. Net NPAs were at 0.51%, lower than 0.68% in the March quarter and 1.46% in Q1FY22. The lender made provisions of Rs 755 crore for the quarter, compared with Rs 1,750 crore in Q1FY22.
New loans booked during Q1 grew 60% to 7.42 million, against 4.63 million in Q1FY22 – that’s 8.2 lakh loans a day. In Q4FY22, new loans booked were 6.3 million.
The capital adequacy ratio (including tier-II capital) as of June 30, 2022 stood at 26.16%. The tier-I capital was 23.84%.