Bajaj Finance on Tuesday reported a 42% year-on-year (YoY) rise in consolidated net profits for the quarter ended March to Rs 1,347 crore on account of a drop in loan loss provisions to Rs 1,231 crore as against Rs 1,954 crore in Q4FY20.
The NBFC’s net interest income fell 0.5% to Rs 4,659 crore. Interest income reversal for the quarter was Rs 298 crore as compared to Rs 122 crore in Q4FY20.
The firm’s gross NPA was higher at 1.79% compared with 1.61% in Q4FY20 while the net NPA was at 0.75% compared to 0.65% in Q4FY20 .
Assets under management grew by 4% during Q4FY21. A diversified business model had enabled the company to revert to pre-Covid levels of AUM, the company said. New loans booked during the quarter was lower at 5.47 million as against 6.03 million in Q4FY20. Except auto finance, new loans origination across businesses had gone to pre-Covid levels. Customer franchise as of March 31, 2021 stood at 48.57 million as against 42.60 million as of March 2020. The company acquired 2.26 million new customers in Q4FY21 as compared to 1.85 million in Q4FY20.
Rajeev Jain, MD of Bajaj Finance, said, barring a national lockdown or extended lockdowns in three to four large GDP contributing states or another moratorium on loan repayment, the company was confident of delivering its long term guidance metrics in FY22.
Jain said at an investor presentation that the disruption in the first quarter could be reasonably mitigated in the balance three quarters of FY22. The company was watching the situation closely and taking appropriate action to navigate through this, Jain said.
Bajaj Finance long term guidance is to grow AUM in the corridor of 25% to 27%, profit growth in the corridor of 23% to 24% and gross NPA in the 1.4% to 1.7% range with net NPA at 0.4% to 0.7%
The company said it had done an accelerated write off in the quarter of Rs 1,530 crore due to Covid related stress and advancement of its write-off policy. After this write-off, the company still holds a management overlay and macro provision of Rs 840 crore and was covered for loans losses and provisions.
The company had a liquidity buffer of Rs 16,485 crore as on March 31, 2021. To optimise cost of funds and to benefit from lower interest rate environment, the company had paid down Rs 7,500 crore to banks in the last two quarters. The cost of funds for Q4FY21 was 7.39% compared 8.37% in Q4FY20.
“Most businesses had started disbursing 90-105% of last year’s volumes with incremental growth being observed every month,” Jain said. The company’s business transformation plan was on track and the company would be launching its omnichannel 3-in-1 financial services in a phased manner by August and September ’21 and this would help in accelerating market share, he said. The omnichannel model would enable customers to move between online to office and vice-versa in a frictionless manner.
The Bajaj Pay for consumers has gone live with the Bharat Bill Pay System and a fully functional UPI would go live by May 2021 after getting regulatory clearance. The insurance and investment marketplace apps would be going live between July and August ’21.
The company’s board recommended a dividend of Rs 10 per equity share of the face value of Rs 2 for FY21.
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