Bajaj Finance Q4: Highest ever Net Profit of Rs 2,420 reported, Dividend declared

Net profit rises: Bajaj Finance has reported a 95% year-on-year jump in net profit to Rs 2,268 crore for Jan-Mar 22 period (Standalone). On a consolidated basis, net profit increased Rs 2,420 crore Y-o-Y, an increase of 80%. Analysts had earlier estimated a consolidated net profit of about Rs 2,440 crore for the period between Jan and March. The company said it had the highest ever consolidated net profit this quarter.

Net interest income increase: 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. Standalone net interest income for Bajaj Finance increased 16% QoQ to Rs 6,381 crore. The consolidated net Interest Income (NII) for Q4FY22 increased by 30% to Rs 6,068 crore as against Rs 4,659 crore in Q4FY21.

Asset Under Management (AUM): Consolidated AUM rose to Rs 1.97 lakh crore from Rs 1.53 lakh crore, an increase of 28% year-on-year. Standalone AUM increased by 27% to Rs 1.47 crore from Rs 1.15 crore in Q4FY21.

Asset Quality improves: The consolidated gross NPA ratio for Q4FY22 stood at 1.60%. It was 1.73% for the period between Oct and Dec and 1.79% in the year-ago period. The net NPA ratio stood at 0.68%, an improvement of 10 basis points sequentially and 7 bps YoY.

Loan Losses and provisions: For Q4FY22, loan losses and provisions were Rs 702 crore as against Rs 1,231 crore in Q4FY21. The company holds management and macro-economic overlay of Rs 1,060 crore as of 31 March 2022. 

Business Growth: All the businesses under Bajaj Finance did extremely well in the fourth quarter on a standalone basis. The consumer B2C business increased by 27% YoY. Rural B2B and B2C businesses grew by 43% and 29%, respectively. The commercial lending business was up by 39%, while auto finance (Consumer B2B) contracted 16% YoY.

Increase in the customer base: Customer franchise stood at 57.57 million as of 31 March 2022, as compared to 48.57 million as of 31 March 2021, a growth of 19%. During the quarter, customer franchises grew by 2.21 million. 

Dividend: The Board of Directors has recommended a dividend of Rs 20 per share for the financial year ended 31 March 2022.

Other Updates: New loans booked during Q4FY22 were 6.28 million as against 5.57 million last year in the same period. The capital adequacy ratio (including Tier-II capital) as of 31 March 2022 was 27.22%. The Tier-I capital was 24.75%.

Subsidiaries Update

• Bajaj Housing Finance Limited: The AUM grew by 37% to Rs 53,322 crore as of 31 March 2022 from Rs 38,871 crore as of 31 March 2021. Net Interest Income for Q4FY22 increased by 22% to Rs 452 crore from Rs 369 crore in Q4FY21. Profit After Tax increased by 11% to Rs 198 crore.
• Bajaj Financial Securities Limited: BFinsec acquired approximately 62K retail and HNI customers in Q4FY22. Customer franchise as of 31 March 2022 stood at approximately 331K. Total Income for Q4FY22 was Rs 39 crore as against Rs 38 crore in Q3FY22. BFinsec generated a profit after tax of Rs 9 crore in Q4FY22.

Bajaj Finance Q4 Results Review:

Bajaj Finance has reported strong set of numbers in Jan-Mar 22 period, aided by improvement in strong core income. The boost to Bajaj Finance's bottom-line in the quarter came from a decline in loan-loss provision to Rs. 702 crore from Rs. 1,231 crore in the year-ago quarter.

Bajaj Finance share price jumped 3% to Rs 7,258.6 on Tuesday.