Bharat Financial Q1 net loss at Rs 37 cr on elevated provisions, fin costs

However, on a sequential basis, there is a marked decline in net loss as well as provisioning in Q1

Microfinance company Bharat Financial Inclusion (BFIL) has reported a net loss of Rs 37.05 crore for the quarter ended June 2017, impacted by the elevated levels of provisions and the financial costs in the second consecutive quarter (Q). BFIL's net profit stood at Rs 235.91 crore in the same quarter year-on-year.

The micro lender has registered an 11.8 per cent growth in total revenues at Rs 463.08 crore in Q1 as compared to Rs 414.11 crore in the year-ago period.

However, total expenses rose 81.8 per cent to Rs 500.13 crore as the provisions towards loan defaults jumped to Rs 175.89 crore as compared to Rs 12.02 crore in the year-ago period. Also, finance costs increased 28.55 per cent to Rs 174.94 crore from Rs 136.08 crore in the year-ago period.

On a sequential basis, there is a marked decline in net loss as well as the provisioning in Q1. The company's net loss was Rs 234.91 crore in Q4 of the previous financial year (FY). Provisioning and write-offs in Q4FY17 stood at 334.55 crore.

Citing a healthy growth and recovery parameters, the company reiterated its earlier guidance of a net profit of Rs 435 crore in FY18.

Its gross loan portfolio registered a 14 per cent growth at Rs 9,631 crore in Q1FY18 as compared to Rs 8,463 crore in the year-ago period. It has added 4.2 lakh members during the quarter. Gross collection efficiency for June 2017 has improved to 98.6 per cent. Consequently, net non-performing assets (NPAs) fell to 1 per cent in Q1, the company said.

"Our strong collection efficiency for loans disbursed post-demonetisation reiterates the strength of our unique operating model," said M R Rao, chief executive officer (CEO) and managing director of BFIL.

The company's cashless disbursals increased to 98 per cent in the month of June 2017(12 percent in January 2017).

In a filing, BFIL management informed that the net deferred tax asset amounting to Rs 290.88 crore till June 2017 has not been recognised and the same will be available to offset tax on future taxable income.