InvestorQ : How do you see the results of Bajaj Finance for the Sep-20 quarter?
Angel dcosta made post

How do you see the results of Bajaj Finance for the Sep-20 quarter?

Juvina Maggie answered.
7 months ago

Bajaj Finance reported a 36% fall in consolidated profit for the quarter ended September 2020. This was hardly surprising and largely anticipated due to elevated provisions. Profits fell yoy to Rs.965 crore during the quarter from Rs.1506 crore in the Sep-19 quarter.

Overall, the net interest income increased by 4% at Rs.4165 crore in the September quarter, much better than the street expectations and the consensus estimates of Bloomberg. Last quarter, Bajaj Finance had taken a huge write off on account of the Karvy fraud.

The total assets under management or AUM of Bajaj Finance was marginally higher at Rs.137,000 crore while new loans booked during September quarter almost halved on a yoy basis due to the weak demand and too much of origination caution.

The company is comfortable on liquidity with a surplus of Rs.22,414 crore up nearly 3-fold on a yoy basis. Hence the company does not foresee any short term liquidity challenges. However, loan loss provisions nearly trebled to Rs.1700 crore in the quarter.

Bajaj Finance had provided another Rs.1370 crore for COVID related provisions taking its total provision for the till date to Rs.5099 crore as of September 2020. It must be said that the company has strong pre-provisioning profitability to manage loan losses, if any.

The provisioning coverage ratio of Bajaj Finance as of September 2020 was flat at 64%. The gross NPAs of the lender were at 1.03% and net NPA at 0.37%, although the full impact of the final Supreme Court order on EMIs has not been quantified yet.