Bajaj Finance Q1 net rises 27% to Rs 176 cr, provisions up

Moneycontrol Bureau

India's largest white-good financing company - Bajaj Finance's first (April-June) first quarter net profit grew at a slower pace by 27 percent year-on-year to around Rs 176 crore, dented by spike in loan losses and provisions that doubled from Rs 32 crore to Rs 64 crore.

However, Bajaj Finance shares fell more than 3 percent to close the day's trading at Rs 1,374. In January-March quarter, the net profit spiked 52 percent to Rs 164 crore.

"As per RBI draft guidelines on NBFCs, we have raised our provisions on standard assets from 0.25 percent to 0.40 percent. Due to this, we had to make a provision of Rs 18 crore, which hit our profit margin. We expect to grow our book by 20-25 percent in FY14," Rajeev Jain, CEO, Bajaj Finance told moneycontrol.com.

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The company is generally known for giving loans to affluent customers for buying consumer durables like fridge, air conditioner (AC), TV, washing machines and other appliances. Its credit disbursements expanded 32 percent y-o-y to Rs 6,250 crore.

"It was our contious decision to reduce exposure in commercial segement including construction equipments, auto components and infrastructure loans. We will continue to do the same. However, we are positively surprised at the growth of our consumer durable loans driven by AC sales," Jain said.

Net interest income (NII) shot up 37 percent y-o-y to Rs 600 crore from Rs 439 crore. Total income grew by 32 percent to Rs 928 crore in April-June quarter FY14.

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The gross non-performing asset ratio inched up to 1.14 percent compared with 1.10 percent a year. Net NPA ratio stood at 0.15 percent as against 0.25 percent.

Bajaj Finance enjoys a high capital adequacy ratio of 21.50 percent as against 15 percent mandated.

saikat.das@network18online.com