Margins steady, Bajaj Fin eyes 25-30% loan growth in FY13

Bajaj Finance reported a net profit of Rs 136 crore against Rs 91 crore on a year-on-year basis. The company's NII stood at Rs 439 crore versus Rs 311 crore in the same period last year. It's net NPA also decreased to 0.1% from 0.46% (y-o-y).

Rajeev Jain, CEO of Bajaj Finance tells CNBC-TV18, the net profit after tax has been driven up mainly because of credit performance which holds reasonably steady across most of the company's businesses. He further added that the margins too are quite secure.
 
Going forward, Bajaj Finance is looking at loan growth of 25-30% in this year. Below is the edited transcript of the interview on CNBC-TV18. Q: It has been a very strong performance this time around, just give us a sense in terms of the asset quality, what led to such a strong improvement on the net NPAs and what is your guidance going forward?
A: We ended the quarter with Rs 14,500 crore of assets under management. Our net NPA was at 10 bps. Sequentially if you look at it, it is only 2 bps drop. We ended the previous quarter at 12 bps and we are at 10 bps.
The credit performance across most businesses continues to hold reasonably steady at this point in time and our loan loss provision have fallen on a year-on-year (YoY) basis, our net interest income is up 41%, our loan loss is down 6% and as a result net profit after tax is up 53-54%. Q: What are the margins you are working with?
A: Our margins are holding steady. The upward transmission over the last four quarters has happened, the downward transmission has started now. Q: So what is the exact margin?
A: We don't quote margin because we have businesses which are like consumer durable business, which are zero percent businesses. So the entire income is realized upfront. Therefore, it essentially creates a confusion. Although, we don't quote, the margins are holding very steady and it has been a good quarter and a good start for the year. Q: What kind of loan growth you think you can manage in the full year?
A: Our view is that between 25% and 30% loan growth for the year. Q1 has been much higher, it has been at 60%. But given what is happening in the external environment, we would like to hold it at 25-30%. Based on how Q2 goes we can probably revise it upwards post Q2.