Consumer financier Bajaj Finance booked its highest-ever quarterly consolidated net profit in July-September (Q2FY23) quarter, backed by healthy growth in net interest income (NII) and lower loan loss provisions. Its net profit for the quarter jumped 88 per cent YoY to Rs 2,781 crore, compared to Rs 1,481 crore in the year-ago period.
NII of the lender grew 31 per cent YoY to Rs 7,001 crore in Q2FY23 compared to Rs 5,337 crore in the year-ago period, on the back of a strong growth in assets under management (AUM). AUM of the lender was up 31 per cent YoY to Rs 2.18 trillion at the end of September quarter.
The company booked 6.76 million loans in Q2FY23, up 7 per cent YoY compared to 6.33 million loans booked in the year-ago period. It added 2.61 million new customers to its fold during this period, taking the customer franchise to 62.91 million. It is targeting to add 10-11 million new customers to its fold in FY23, and is on track on doing so, the company said. It expects its customer franchise to stand at 68-69 million customers by the end of FY23.
Loan loss provisions of the lender dropped 44 per cent YoY to Rs 734 crore in Q2FY23 compared to Rs 1,300 crore in the year-ago period. The company expects its loan losses at 1.35-1.45 per cent of average assets in FY23. It is holding a management overlay of Rs 1,000 crore as of September quarter.
Asset quality of the lender improved further as gross NPAs declined by 8 basis points (bps) sequentially to 1.17 per cent and net NPAs declined by 6 bps to 0.44 per cent.
Its deposit book stood at Rs 39,422 crore at the end of the September quarter, with Rs 5,320 crore added as deposits during the quarter. It is on track to deliver its long-term goal of 25 per cent consolidated borrowing from deposits in the medium term.
“An excellent first half for the company across balance sheet growth, portfolio quality and profitability. Strong momentum across all lines of businesses with secular AUM growth in the first half. Confident of strong FY23,” the company said in a statement.
“The results are largely in line with expectations. We believe, though recent performance is priced in the stock, the continued AUM momentum sets the stage for strong profit growth and sustainable return ratios over the medium term. We remain bullish on Bajaj Finance future performance,” ICICI Securities said in a note.
Shares of the lender closed at Rs 7,429.25, up 0.69 per cent from previous days’ close.