Bajaj Finserv net profit plunges 77 pc to Rs 194 cr in Mar quarter

Bajaj Finserv Ltd (BFL) on Thursday reported a plunge of 77 per cent in its consolidated net profit to Rs 194 crore for the fourth quarter ended March 2020, mainly due to the COVID-19 impact on group companies.

The company had posted a net profit of Rs 839 crore during the corresponding January-March period of 2018-19.

Excluding the COVID-19 impact, it said the net profit during the March quarter would have been Rs1,001 crore.

Its total consolidated income during the March 2020 quarter, however, increased by a little over 2 per cent to Rs 13,294 crore as against Rs12,995 crore in the corresponding period of the previous financial year, BFL said in a release.

On the yearly basis, the company said it has posted the highest-ever net profit as well as total income, adding that the profit is highest-ever for the sixth consecutive time.

The profit after tax in 2019-20 rose to Rs3,369 crore, against Rs 3,219 crore in the year-ago period, the company said.

The consolidated profit after tax, excluding the COVID-19 impact, jumped to Rs4,176 crore from Rs 3,219 crore, it added.

The company's consolidated total income was at a record Rs 54,351 crore in 2019-20 as compared to Rs 42,606 crore in 2018-19.

"Even without the terrible effects of the COVID-19 pandemic, India's GDP (gross domestic product) growth had shown clear signs of slowing down," BFL said.

Due to lockdown and subsequent moratorium on loan instalments, performance of banks and non-banking financial companies (NBFCs) were impacted in March, it said adding that standstill in new car sales and grace period to customers on premium payment equally impacted the life and general insurance sectors.

Despite these challenges, the company has been able to record its highest-ever annual consolidated total income and profit after tax, BFL said in the release.

Under the Ind-AS (Indian Accounting Standards), the insurance subsidiaries have chosen to hold equity securities as fair value through profit and loss account and, therefore, the insurance companies had an unrealised mark-to-market (MTM) pre-tax loss of Rs 768 crore in the consolidated financials, the company added.

"Additionally, BFL made a pre-tax provision of Rs 900 crore in the form of contingency provision on account of the impact of COVID-19," it said.

The MTM adjustment and the contingency provision, together considered as COVID-19 impact, after adjusting for tax and the company's interest in those subsidiaries have impacted consolidated profit after tax of BFL for the fourth quarter and 2019-20 by Rs 807 crore, it added.

The holding company of the financial services of the Bajaj group said it had declared an interim dividend of Rs 5 per equity share (100 per cent) on February 21 and paid on March 9.

The said amount has been declared as final dividend for 2019-20.

BFS holds52.82 per cent inBajaj Finance Ltd. It also has74 per cent holding in unlisted subsidiaries, Bajaj Allianz General Insurance Company Ltd and Bajaj Allianz Life Insurance Co Ltd.

Shares of Bajaj Finserv on Thursday closed 3.64 per cent down at Rs 4,537.75 on the BSE.