Bajaj Finance net up 20% on higher retail, SME lending

Bajaj Finance today reported 20% jump in the June quarter net profit at Rs 211 crore on the back of jump in deployments to consumers and small businesses.

The Pune-headquartered non-banking company said there was 48% rise in deployments during the quarter at Rs 9,266 crore.

Chief Executive Rajeev Jain attributed the good set of numbers partly to seasonal factors, saying the first and the third quarters are generally busy for the company.

The deployment growth was led primarily by the small and medium enterprises and consumer segments, which grew 54% and 48%, respectively.

Its total income was up 34% to Rs 1,246 crore while profit before tax jumped 20% to Rs 321 crore.

Jain said the gross non-performing assets ratio was largely flat at 1.13%, while the net non-performing assets ratio marginally improved to 0.27%.

An accelerated provision of Rs 10 crore resulted in the loan loss provisions going up to Rs 83 crore from Rs 60 crore last year, Jain said.

The accelerated provision is for assets which the company feels might turn bad in the coming quarter and is a prudent practice adopted by it, he said, adding this shall get utilised in the next two quarters.

The company's total capital adequacy ratio stood at 18% while it may be going in for a round of capital raising in early next fiscal, Jain said.

However, he did not elaborate, saying it is very early to comment.

On the regular funding for onlending activities front, he said there was some benefit as the rates eased by up to 0.25% during the quarter, but was quick to add that the margins did not benefit much through this as the benefit was felt in short-term funds, which account only for 10-12% of its funding.

The company's scrip gained 0.09% to close at Rs 2,186.70 apiece on the BSE, whose 30-share benchmark Sensex ended the session with gains of 1.27%.