Bajaj Finance Q2 beats estimates, profit grows 63% with net slippages falling sharply

Bajaj Finance on October 22 reported a whopping 63 percent year-on-year (YoY) rise in July-September quarter profit at Rs 1,506.3 crore, beating analysts expectations.

In Q2FY19, the company had reported a profit of Rs 923.5 crore

Net interest income increased 48 percent year-on-year to Rs 3,999 crore in Q2, with assets under management growth of 38 percent at Rs 1.35 lakh crore YoY.

The non-banking finance company said new loans increased 23 percent YoY to 6.47 million in September quarter.
According to a poll of analysts conducted by CNBC-TV18, profit was estimated at Rs 1,338.5 crore and NII at Rs 3,474.1 crore for the quarter.

Asset quality was also largely stable with gross non-performing assets as a percentage of gross advances at 1.61 percent for the quarter against 1.60 percent in previous quarter while net NPA increased 2bps sequentially to 0.65 percent in Q2.

Total slippages increased to Rs 786 crore at the end of September quarter 2019, against Rs 702 crore in June quarter but net slippages dropped to Rs 119 crore compared to Rs 290 crore in the same period.

Recoveries and write-offs for the September quarter stood at Rs 667 crore against Rs 412 crore in the previous quarter, while roll-back to standard at the end of September quarter came in at Rs 361 crore against Rs 216 crore QoQ.

The company reported provisions for bad loans for the quarter at Rs 554 crore, showing a marginal increase against Rs 551 crore in June quarter. Provision coverage ratio declined to 60 percent in Q2 against 61 percent on sequential basis.

Bajaj Finance said total operating expenses to net interest income for Q2FY20 improved to 34.6 percent against 35.4 percent in Q2FY19.

The stock hit a record high of Rs 4,219.50 during the day. It was quoting at Rs 4,169.55, up Rs 31.50, or 0.76 percent on the BSE at 1336 hours.