Earnings to remain strong going ahead: Bajaj Finserv

Bajaj Finserv’s consolidated net profit for the first quarter of FY13 stood at Rs 195 crore versus Rs 129 crore, year-on-year, YoY. Consolidated income from operations was at Rs 927 crore against Rs 613 crore, YoY.

Bajaj is optimistic about the financial performance to be strong going ahead, but he prefers to be a little cautious too. “These numbers have been extraordinarily positive given the overall weak economic scenario around us. But 50% growth rate does seem to be too much to ask for.”

Meanwhile, its subsidiary Bajaj Finance will garner Rs 750 crore via rights issue towards the end of this year, he informed. "We expect to do this over the next 4-5 months. I would think that the equity dilution is about 11-12%."

Below is the edited transcript of Bajaj’s interview with CNBC-TV18.

Q: How did the quarter panned out? Can you give us a break up between both the life insurance segment and the general insurance segment where you have reported a PBT loss last quarter; has there been a recovery this time?

A: We have had a great set of numbers across the three main companies. You named two of them, as far as life insurance is concerned, for the first time after many quarters, after really 6-7 quarters we have seen a growth in the new business premium.

This is significant given all the changes that had happened over the last two years in life insurance at the industry level and for us. We saw a 28% growth in new business premium to Rs 484 crore and led by this we have seen PAT jump 40% to Rs 74 crore.

The general insurance has been even better, while our top line, our gross premium has gone up 18% to Rs 940 crore. We have seen a 66% increase in PAT to Rs 65 crore. The third important business here is Bajaj Finance. Bajaj Finance has seen again gross income go up 56% to Rs 703 crore and similar increase in PAT to Rs 139 crore.

A combination of very strong profit growth between 40-65% across these three companies has helped us grow our consolidated PAT by 51% to Rs 195 crore.

Q: Overall for Bajaj Finserv particularly what kind of guidance can you throw up for the full year for FY13? Do you think you would be able to maintain this trajectory that you are seeing now?

A: I won’t hazard a guess with the guidance. These numbers have been extraordinarily positive given the overall weak economic scenario around us. What happens as far as the economic situation is concerned can play a significant role both in Bajaj Finance and our insurance companies where large part of our business is consumer driven.