Bajaj Finance Q4 results: AUM, Net Profit, Asset Quality, Margins and more
Last updated: 29 Apr, 2021 | 12:10 pm
Net profit rises: Bajaj Finance has reported a 42% jump in consolidated net profit to Rs 1,347 crore for Q4FY21. Analysts had earlier estimated a profit of about Rs 1311 crore for the period between January and March.
Net interest income drops slightly: An NBFCs primary business is to borrow money and lend the same at a rate higher than the rate at which they borrowed. The income generated from this differential is known as net interest income. This is an extremely important number to truly find out as to how much a company is earning from its core operations. Net interest income for Bajaj Finance declined by half a percent to Rs 4,659 crore from Rs 4,684 crore. However, it is above street expectations of about ₹4,438.8 crore.
Consolidated AUM rose to ₹1.53 lakh crore as compared to ₹1.47 lakh crore in the previous quarter. The table below shows AUM growth for the top 5 segments of Bajaj Finance.
Asset quality: Overall asset quality improved by more than a percent for Bajaj Finance. The gross non-performing asset ratio was at 1.79% compared with 2.86% in the last quarter. The net non-performing assets rose to 0.75 % of its total advances compared to pro forma net NPA of 1.22% in the preceding quarter. Loan loss provisions in the fourth quarter stood at Rs 1,231 crore, down 37% year-on-year from Rs 1,954 crore. The highest gross NPA ratio was for the auto finance business and it was 9.3%.
Liquidity Health of Bajaj Finance: The company has stated that it is comfortable in terms of capital and liquidity. The Capital Adequacy Ratio (CAR) stood at a robust 28.34% at the end of Q4FY21. The tier-I capital stood at 25.10%. Liquidity surplus stood at Rs 16,485 crore, representing 12.5% of total borrowing. It was 11.6% in the previous quarter.
Despite significant disruptions at present, the company remains open for business across geographies in line with local administration advisories. As a high-frequency indicator, in the last 7-10 days, the company has continued to originate 50-55% of daily volumes in B2B business, 80-85% in B2C and SME businesses, and 40-50% in mortgages. Based on the above number, it is clear there is some impact on the business. Once the situation improves, the company should be able to cover up the volumes. The company has given exceptional results in the last decade, and it has the potential to continue its winning journey. While the ongoing crisis has been hard for banks and NBFC’s, given its strong leadership position and robust balance sheet, the company is very well equipped to navigate these difficult times.