Table of Content
Introduction
Bajaj Finance Limited is a prominent non-banking financial company (NBFC) headquartered in Pune, India. Established in 1987, the company has grown into one of the country’s leading and most diversified NBFCs. Bajaj Finance primarily focuses on lending and investment activities across various sectors.
The company offers a wide range of financial products and services, including consumer finance, housing loans, personal loans, business loans, and insurance, catering to the diverse financial needs of individuals and businesses.
The company released its standalone and consolidated Q2 results for the period ending 30 Sep, 2023. The consolidated report includes its subsidiaries, Bajaj Housing Finance Limited and Bajaj Financial Securities Limited, and its associate company Snapwork Technologies Private Limited. Here is what you need to know.
Additional Read: Q2 Results Dashboard
Performance Highlights
- Total revenue from operations: ₹ 13,378.26 Cr
- Profit before tax: ₹ 4,757.76 Cr
- Profit after tax: ₹ 3,550.80 Cr
- Total comprehensive income: ₹ 3,572.97 Cr
- Consolidated Assets Under Management (AUM): ₹ 290,264 Cr
Bajaj Finance Ltd. announced its Q2 FY 23-24 results on 17th October. The company saw an increase in consolidated net profit of 28% (₹ 3,550.80 Cr). This sentiment can be seen in the performance of the company’s stock as well.
That aside, the key drivers of the increase in net profit have been:
- enhanced net interest income (NII)
- increased new loans
- improved asset quality
NII
In the financial report for the second quarter of the fiscal year 2024, there was a notable upswing in net interest income, which surged by 26% to approximately ₹ 8,845 crore, as compared to the ₹ 7,002 crore recorded in the second quarter of the fiscal year 2023.
Additional Read:
New Loans
The number of newly sanctioned loans exhibited significant growth too, surging by 26% to reach 8.53 million, compared to the 6.76 million loans recorded during the same period in the previous fiscal year.
Asset Quality
As of September 30, 2023, the company reported Gross Non-Performing Assets (NPA) at 0.91% and Net Non-Performing Assets (NPA) at 0.31%. This represents a noteworthy improvement from the figures reported on September 30, 2022, where Gross NPA stood at 1.17%, and Net NPA was at 0.44%. The company has also maintained a provisioning coverage ratio of 66% on stage 3 assets as of September 30, 2023, indicating a strong commitment to risk management and financial prudence.
The ratio of operating expenses to net interest income for the second quarter of the fiscal year 2024 (Q2 FY24) improved, standing at 34.0%, compared to the 35.9% reported in the second quarter of the fiscal year 2023 (Q2 FY23). This signifies a positive trend of enhanced cost management and operational efficiency during Q2 FY24.
Additional Read: Bajaj Finance Share Price
Management Commentary
Major Announcements
- 22% increase in customer franchises to 7.656 Cr from 6.291 Cr in Q2 last year.
- 33% YoY rise in AUM from ₹ 218,366 Cr to ₹ 290,264 Cr.
- 26% growth in new loans booked, from 6.76 million in Q2 FY23 to 8.53 million as of 30 Sep, 2023.
- Capital adequacy ratio of 23.19%.
- Annualised Return on Assets (ROA) of 5.2%.
- Annualised Return on Equity (ROE) of 24.1%.
- Consolidated deposits reached beyond the ₹ 50,000 Crore mark at ₹ 54,821 crore in Q2 FY’24.
In the second quarter of the current fiscal year, loan losses and provisions amounted to approximately ₹ 1,077 crore, in contrast to the ₹ 734 crore reported during Q2 FY23. As of September 30, 2023, the company maintains a management and macro-economic overlay of approximately ₹ 740 crore.
Credit Rating
- Long-term debt: Highest credit rating of AAA/Stable from CRISIL, ICRA, CARE, and India Ratings.
- Short-term debt: Top-tier rating of A1+ by CRISIL, ICRA, and India Ratings.
- Fixed deposits: AAA (Stable) rating from both CRISIL and ICRA for its fixed deposits programme.
Bajaj Finance: Comparison of Consolidated Financial Figures
| Q2 FY 2022-23 | Q1 FY 2023-24 | Q2 FY 2023-24 | |
| Total revenue from operations | ₹ 9,970.13 Cr | ₹ 12.497.81 Cr | ₹ 13,378.26 Cr |
| Total income | ₹ 9,974.25 Cr | ₹ 12,500.54 Cr | ₹ 13,381.75 Cr |
| Total expenses | ₹ 6,221.96 Cr | ₹ 7,952.16 Cr | ₹ 8,624.14 Cr |
| Profit before tax | ₹ 3,752.29 Cr | ₹ 4,551.21 Cr | ₹ 4,757.76 Cr |
| Profit after tax | ₹ 2,780.65 Cr | ₹ 3,436.89 Cr | ₹ 3,550.80 Cr |
| Total comprehensive income | ₹ 2,798.22 Cr | ₹ 3,468.77 Cr | ₹ 3,572.97 Cr |
Standalone and Subsidiaries Performance
Bajaj Finance Standalone Performance Highlights
- An impressive 35% YoY surge in AUM from ₹ 159,452 Cr (Q2 FY 22-23) to ₹ 214,891 Cr (Q2 FY 23-24).
- 26% jump in NII from ₹ 6,397 Cr in the same period last year to ₹ 8,059 Cr on 30 Sep, 2023.
- 26% growth in PAT that stood at ₹ 3,106 Cr in Q2 this year versus ₹ 2,472 in Q2 last year.
Subsidiary: Bajaj Housing Finance Limited Standalone Performance Highlights
- 29% YoY AUM growth – from ₹ 62,931 Cr to ₹ 81,215 Cr.
- NII increase of 29% – from ₹ 590 Cr to ₹ 761 Cr.
- PAT jump of 47% – from ₹ 306 Cr to ₹ 451 Cr.
Subsidiary: Bajaj Financial Securities Limited Standalone Performance Highlights
- New customer acquisition of ~32,800.
- Total customer franchise, as of 30 Sep, 2023 stands at ~ 617,800.
- Total income – ₹ 108 Cr in Q2 FY 23-24 as compared to ₹ 49 Cr in Q2 FY 22-23.
- PBT – ₹ 17 Cr in Q2 FY 23-24 as compared to ₹ 1 Cr in Q2 FY 22-23.
- PAT – ₹ 13 Cr in Q2 FY 23-24 as compared to ₹ 1 Cr in Q2 FY 22-23.
