Bajaj Finance hits 52-week low after Q4 update

Bajaj Finance on Monday (6 April 2020) reported a 22% sequential fall in new loans booked during Q4 March 2020 to 6 million due to the national lockdown.

New loans booked during Q4 March 2020 was 6.0 million (MM) as compared to 5.8 MM in Q4 March 2019 and 7.7 MM in Q3 December 2019. The company lost about 1 MM accounts on account of nationwide lock down.

On a year-on-year basis, the growth under new loans booked slowed down to 3% in Q4 March 2020 compared to a growth of 53% during Q4 March 2019.

Customer franchise as of 31 March 2020 stood at 42.6 MM as compared to 34.5 MM as of 31 March 2019. During the quarter, the company acquired 1.9 MM new customers. Had it not been for lock down, the company could have added another 350,000 more customers taking the total to 2.25 million new customers addition during the quarter.

Addressing an analysts call on Monday (6 April), the company's management said it expects demand to revive by July and business to normalise by October.

Assets under management (AUM) stood at 147,600 crore as of 31 March 2020 as compared to 115,888 crore as of 31 March 2019. The company was well on course to deliver an AUM of over 1,52,000 crores until the lockdown was announced.

The company continues to remain well capitalized with capital adequacy ratio (CRAR) of approximately 25% as of 31 March 2020.

Consolidated liquidity surplus stood at 15,800 crore as of 31 March 2020. The company's liquidity position remains very strong.

Deposit book stood at 21,400 crore as of 31 March 2020 compared to 13,193 crore as of 31 March 2019. The mix of retail and corporate book stood at 72:28.

The company is assessing adequacy of provisioning for identified large accounts and will consider enhancing provisions for these accounts. The company is also considering one-time accelerated provisioning for Covid- 19 to further strengthen its provisioning standards.

On a consolidated basis, the NBFC's net profit jumped 52.3% to Rs 1614.11 crore on a 40.7% rise in total income to Rs 7025.93 crore in Q3 December 2019 over Q3 December 2018.

Bajaj Finance is engaged in lending and allied activities. It focuses on consumer lending, small and medium-sized enterprises (SME) lending, commercial lending, rural lending, fixed deposits and value-added services.

Shares of Bajaj Finance were down 3.14% at Rs 2138. The stock fell 5.63% to hit the day's low at Rs 2083, which is also a 52-week low for the counter.

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