Bajaj Finance Q1 net up 43% to Rs 1,195 crore on higher interest income

Financial services company Bajaj Finance reported a 43 per cent growth in its consolidated net profit at Rs 1,195 crore in the April-June quarter (Q1) of FY20 on account of an impressive growth in interest income. In the same period last fiscal, the company’s net profit stood at Rs 836 crore.

Net interest income of the company registered a 43 per cent jump at Rs 3,695 crore. Total income of the company was up 47 per cent at Rs 5,808 crore as compared to Rs 3,938 crore in the same period last fiscal.

Loan losses and provisions of the company was up 69 per cent to Rs 551 crore from Rs 327 crore in Q1FY19. The provision coverage ratio of the company was 61 per cent in the June quarter as compared to 69 per cent in the year ago quarter and 60 per cent in the March quarter.

Bad assets of the company saw a marginal rise as gross non-performing assets (NPAs) rose to 1.60 per cent as compared to 1.54 per cent in the same period last fiscal. The net NPAs stood at 0.64 per cent, a 1 basis point increase from 0.63 per cent in Q1FY19. Total slippages of the company were to the tune of Rs 702 crore in Q1FY20 as compared to Rs 379 crore in Q1FY19. Slippages were to the tune of Rs 607 crore in the March quarter of FY19.

The assets under management of the company grew 41 per cent to Rs 1.28 trillion in the June quarter as compared to Rs 91,287 crore in the same quarter last fiscal. The capital adequacy ratio of the company as of June 30,2019 stood at 19.48 per cent.

The company said overall cost of funds remained very steady at 8.5 per cent owing to good asset liability management and strong liquidity position. “Consolidated liquidity buffer (free cash and liquid investments) stood at Rs 6,343 crore as of 30 June 2019. We remain very comfortably placed on liquidity”, the company further said.

The management also said they have cut new disbursements by 15-18 per cent as they have tightened underwriting standards in digital product financing to urban and rural business. Similarly, they have also cut disbursement by 10-12 per cent to small and medium sized enterprises to consumer segments.

In the auto segment, which is currently going through a slowdown, the company has tightened its underwriting standards.

Bajaj Finance was trading 4.07 per cent lower at Rs 3042.55 on the BSE at 1:38 PM.