Leading non-bank lender Bajaj Finance on January 18 reported an 84.4 percent year-on-year growth in net profit at Rs. 1,933.9 crore for the quarter ended December, which was higher than analysts' estimate.
The financial company's net interest income in the quarter jumped 40 percent on-year to Rs. 5,553 crore with assets under management (AUM) rising 21 percent on-year to Rs. 1.3 lakh crore.
Analysts had expected the company to report 57.5 percent on-year growth in net profit at Rs. 1,804.8 crore and 17.3 percent rise in NII at Rs. 5,038.7 crore.
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The boost to Bajaj Finance's bottomline in the quarter came from a decline in loan-loss provision to Rs. 995 crore from Rs. 1,245 crore in the year-ago quarter. The biggest drop was witnessed in loan-loss provisions for stage 3 and write-offs in the quarter, which nosedived 78 percent on-year to Rs. 816 crore, the company said.
"Interest income reversal for Q3FY22 was Rs. 241 crore. By Q4, interest reversals should normalise to pre-Covid levels of Rs. 180-200 crore," the company said in an investor presentation.
The company enjoyed a strong quarter in terms of loan disbursement as loans booked in the quarter rose to 7.35 million, a growth of 23 percent year-on-year.
The company's customer franchise stood at 55.36 million as of December 31, a growth of 20 percent on-year. In the reported quarter, customer franchise grew by 2.56 million, the company said.
Bajaj Finance said that with the increase in adoption of new mobile application, the annual customer franchise addition should accelerate to 8-9 million as against earlier guidance of 7-8 million.
"A very good quarter and the company is very well positioned to navigate wave three of the pandemic," said Rajeev Jain, managing director at Bajaj Finance in an investor call.
On the revenue front, the fee business did well for the company as it grew 54 percent on-year to Rs. 1,146 crore. On the interest side, income grew 27 percent on year to Rs. 6,335 crore.
Cost of funds for the company declined to 6.72 percent from 6.77 percent in the previous quarter.
Bajaj Finance said that competitive intensity across products has increased rapidly after the second wave of the pandemic. "So far, the company has been able to protect its margin profile across businesses," Bajaj Finance said.
Bajaj Finance's gross non-performing loans ratio declined to 1.73 percent as against 2.45 percent in the previous quarter. Similarly, net NPA ratio fell to 0.78 percent in the reported quarter from 1.1 percent in the previous quarter.Shares of the non-bank lender ended 1.1 percent lower at Rs. 7,770 on the National Stock Exchange.