Bajaj Finance Q4 profit surges 80%, tops market estimates

It was a record quarter for Bajaj Finance with consolidated net profit rising 80% on year to an all-time high of Rs 2,420 crore in the January-March quarter. The profit topped analysts’ estimate of around Rs 2,300 crore.

The strong earnings followed robust expansion in business with consolidated assets under management at a record high of Rs 1,97,452 crore as of March 31, 2022, up 29% from Rs 1,52,947 crore a year ago.

For the whole of FY22, the consolidated profit after tax grew 59% to Rs 7,028 crore from Rs 4,420 crore in the preceding year.

Loan losses and provisions almost halved to Rs 702 crore during the last quarter of the financial year, from Rs 1,231 crore a year ago.

Gross non-performing asset ratio contracted to 1.60% as of March 31, 2022 from 1.79% a year ago and net NPA ratio improved to 0.68% from 0.75%.

The company's provisioning coverage ratio was at 58% at the of the quarter.

Other key highlights

1) Core AUM grew by Rs 10,837 crore in January-March and with a secular growth across all lines of businesses.

2) Deposits grew 19% on year to Rs 30,800 crore as of March 31, 2022.

3) New loans booked during January-March grew 15% on year to 62.8 lakh.

4) Net interest income for the quarter rose 30% to Rs 6,068 crore from Rs 4,659 crore a year ago.

5) The board has recommended a dividend of Rs 20 per share for FY22.

6) Fourth-quarter profit after tax of subsidiary Bajaj Housing Finance grew 11% on year to Rs 198 crore.

7) Capital adequacy ratio as of March 31, 2022 was at 27.22%. The Tier 1 capital was 24,75%.

8) In the last quarter of the financial year, the company added 81 new locations to its distribution footprint.

Growth drivers

Web remains an “extremely important” driver of traffic, volumes and service to customers in the digital space, the company said in its investor presentation.

In FY23, the company will completely transform web experience enabled by a common technology infrastructure layer between app and web, the phase 1 of which will go live by October 2022 and phase 2 by March 2023, it said.

To fill the gap in its distribution network, the company continues to invest deeply in Uttar Pradesh, Bihar and north-eastern states, Bajaj Finance said.

The company plans to build 17 new features and components as part of its phase 2 digital app platform. The final additional features and components which will get deployed in FY23 between 3 sprints, now stands at 62 features and components.