InvestorQ : Can you tell me how Bajaj Finance posted such a strong growth in profits in the September 2022 quarter results?
Arusha Ray made post

Can you tell me how Bajaj Finance posted such a strong growth in profits in the September 2022 quarter results?

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1 month ago
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For the September 2022 second quarter, Bajaj Finance reported 28.9% growth in total revenues at Rs9,968 crore on a consolidated basis. The number of new loans booked grew by 7% to 6.76 million even as the crucial net interest income (NII) grew 31% in the quarter to Rs7,001 crore. Not surprisingly, the IPO financing revenues were down 38% due to tepid IPO markets. However, big growth segments came from LAS at 67%, commercial lending 36%, SME lending 32% and rural B2B and B2C lending at 34%. The deposit base of Bajaj Finance registered a growth of 37% yoy while the assets under management (AUM) surged 31% in the quarter to Rs2.18 trillion. Capital adequacy was relatively comfortable at 25.13%.

Bajaj Finance

Rs in Crore

Sep-22

Sep-21

YOY

Jun-22

QOQ

Total Income (Rs cr)

₹ 9,968.40

₹ 7,733.84

28.89%

₹ 9,282.76

7.39%

Operating Profit (Rs cr)

₹ 3,752.29

₹ 2,004.45

87.20%

₹ 3,502.76

7.12%

Net Profit (Rs cr)

₹ 2,780.65

₹ 1,480.99

87.76%

₹ 2,596.25

7.10%

Diluted EPS (Rs)

₹ 45.81

₹ 24.42

₹ 42.78

OPM

37.64%

25.92%

37.73%

Net Margins

27.89%

19.15%

27.97%

For the Q2FY23 quarter, the net Profit after tax (PAT) was up 87.8% at Rs2,781 crore; record profits in any quarter put out by Bajaj Finance in its entire history. This was aided by a spike in the net interest income (NII) and a fall in gross NPA levels. For instance, the Gross NPAs fell yoy from 2.45% to 1.17% while net NPAs fell from 1.10% to 0.44%. Profits were also boosted by a near 50% fall in the loan loss provisions for the quarter to Rs734 crore. The ratio of total operating expenses to NII fell from 38.11% to 35.9% yoy. PAT margins were flat on a sequential basis but sharply higher at 27.89% in the Sep-22 quarter compared to 19.15% in the Sep-21 quarter. Most of the doubtful assets in the books of Bajaj Finance are already provided for, as is evident from the almost minimal net NPAs of Bajaj Finance.

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