Bajaj Finance Q1 results: Net profit climbs to 32% on healthy NII

Guides for 29-31% growth in assets in FY24

Pune-based Bajaj Finance’s consolidated net profit for the first quarter (Q1) ended June 2023 rose by 32 per cent year-on-year (YoY) basis to Rs 3,437 crore, backed by healthy growth in net interest income (NII).
 
NII for Q1 of 2023-24 (FY24) expanded by 26 per cent YoY to Rs 8,398 crore, up from Rs 6,640 crore in Q1 of 2022-23 (FY23).
 
In Q1FY24, the cost of funds was 7.61 per cent, an increase of 22 basis points (bps) over the January-March quarter (fourth quarter) of FY23.
 
Given the strong asset liability management and diversified balance-sheet profile, the net impact on NII sequentially was 11 bps.
 
“We expect gradual moderation in NII to continue through FY24,” Bajaj Finance said in an analyst presentation.
 
Bajaj Finance stock closed 2.3 per cent lower at Rs 7,431 per share on the BSE. Its capital adequacy ratio stood at 24.61 per cent as of June 30, 2023.
 
Its assets under management (AUM) grew by 32 per cent to Rs 2.7 trillion as of June 30, 2023, from Rs 2.04 trillion as of June 30, 2022.
 
The company clocked the highest-ever quarterly AUM growth of Rs 22,718 crore in Q1. New loans booked were up 34 per cent to 9.94 million in Q1, compared with 7.42 million in Q1FY23, marking the highest-ever new loans in a quarter.
 
“Based on a strong Q1 start, we estimate AUM growth to be in the range of 29-31 per cent for FY24,” the company said.
 
Deposit book grew by 46 per cent YoY and stood at Rs 49,944 crore as of June 20, 2023. Deposits contributed to 21 per cent of consolidated borrowings as of June 30, 2023.
 
Bajaj Finance, in a statement, said loan losses and provisions for Q1FY24 were Rs 995 crore, compared with Rs 755 crore in Q1FY23.
 
The company holds a management and macroeconomic overlay of Rs 840 crore as of June 30, 2023.
 
Its asset quality improved, with gross non-performing assets (NPAs) declining to 0.87 per cent as of June 30, 2023, from 1.25 per cent a year ago, and net NPAs down to 0.31 per cent as of June 30, 2023, from 0.51 per cent a year ago.
 
The company maintained a provision coverage ratio of 65 per cent as of June 30, 2023.