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Bajaj Finance Net Profit Zooms 88% YoY to ₹2,781 Crore, Asset Quality Sees Improvement

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  • Bajaj Finance’s second quarter net profit grew 88% to ₹2,781 crore compared to the same quarter last year.
  • The NBFC reported an improvement in the quality of its assets, while new loan accounts were up 7% year-over-year.
  • The company also reported a drop in provisions of more than 43%, boosting earnings growth.

Bajaj Finance today reported an 88% increase in second quarter earnings to ₹2,781 crore, compared to the same quarter last year. Net interest income (NII) increased by 31% to ₹ 7,001 crore in the same period.

Total revenues increased 29% to 9,968 crore for the quarter from ₹7,731 crore in the same quarter a year ago. Total assets under management increased 31% to 2,18,366 crore.

Asset quality had improved significantly, with net non-performing assets (NPAs) falling to 0.44% in the quarter from 1.1% a year ago and 0.51% in the first quarter.

In an earlier update, Bajaj Finance revealed that its customer base is up 19% year-over-year to 62.91 million. It also announced that deposits rose 37% during this period, while the company’s excess liquidity declined 19% sequentially. Jefferies analysts say this will help support net interest margins throughout the quarter.

The company’s provisions also fell more than 43% to 734 crore, from ₹1,300 crore a year ago. New loan accounts were up 7% in the quarter.

The operating expenditure (Opex) to NII ratio — which explains how much the company spent in its operations to earn its NII in the quarter — remained unchanged sequentially to 35.9%. However, it has seen an improvement from a year ago which was 38.1%.

Bajaj Finance expects to keep its opex to NII ratio between 35-36% in FY23.

Bajaj Finance also said it is gradually passing on the higher interest rates to its customers.

The Jefferies report also recommended a hold rating with a price target of ₹8,000, up 7.8% from the current stock price.

Here’s Bajaj Finance’s second quarter in numbers:

Particularities Q2 FY23 Q1 FY23 Q2 FY22
Total income ₹9.968 crore ₹9.283 crore ₹7,734 crore
Net interest income ₹7.001 crore ₹6,638 crore ₹5,337 crore
Net profit ₹2.781 crore ₹2,596 crore ₹1,481 crore

Source: Company Reports

Overall, Bajaj Finance’s total workforce was 39,423, up from 37,873 in the previous quarter.

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