InvestorQ : Why did Bajaj Finance profits fall so sharply in the Dec-20 quarter?
Riya Dwivedi made post

Why did Bajaj Finance profits fall so sharply in the Dec-20 quarter?

Answer
image
shrinidhi Rajan answered.
8 months ago
Follow

Bajaj Finance Q3 net profits were down by 29% on a yoy basis at Rs.1,146 crore largely on the back of COVID related asset Impairments provided for. Bajaj Finance reported 5.18% lower consolidated revenues at Rs.6,656 crore in the Dec-20 quarter. The customer franchise did improve by 15% yoy, but new loans were sharply lower due to COVID effect.

There was a serious dent on operational performance in the Dec-20 quarter. Operating profits were down 28.37% at Rs.1,555 crore due to lower interest income earned and higher fees and commissions paid out. This resulted in the operating margin contracting from 30.91% in Dec-19 quarter to 23.35% in Dec-20 quarter.

Profit after tax for the Dec-20 quarter was down 29% at Rs.1,146 crore on the back of 50% spike in financial impairment on investments. As a result, the PAT margins contracted from 22.99% in Dec-19 to 17.22% in Dec-20. In fact, the main culprit was the provisions made for investment impairment up from Rs.830 crore in the Dec-19 quarter to Rs.1352 crore in Dec-20 quarter.

0 Views