NBFC major Bajaj Finance Ltd reported strong financial results for the first quarter of FY24, showcasing significant growth across various key metrics. The company’s consolidated net profit reached ₹3,437 crore, marking an impressive 32% increase from the ₹2,596.3 crore recorded in the corresponding quarter of the previous year.
The net interest income (NII) of the company (NBFC) witnessed substantial growth, rising by 26% to ₹8,398 crore in Q1FY24 from ₹6,640 crore in the same period last year.
Bajaj Finance also experienced remarkable expansion in its assets under management (AUM), which surged by 32% YoY to ₹270,097 crore. Notably, the company achieved its highest-ever quarterly increase in AUM, adding ₹22,718 crore in Q1FY24. The AUM mix remained stable during the quarter.
The number of new loans booked during the quarter soared by 34% YoY to 9.94 million, the highest ever recorded in a quarter.
However, despite these positive developments, the cost of funds rose to 7.61% YoY in Q1FY24, an increase of 22 bps over Q4 FY23, impacting the net interest income. The company anticipates a gradual moderation in NII to persist throughout FY24.
On the asset quality front, Bajaj Finance demonstrated improvement as the gross non-performing assets (NPA) ratio declined to 0.87% in the April-June quarter, down from 0.94% in the previous quarter, and 1.25% in the same period the previous year. The net NPA ratio also improved, reaching 0.31% in Q1FY24, a decrease from 0.34% sequentially and 0.51% YoY. The company provided long-term guidance for gross NPA at 1.2-1.4% and net NPA at 0.4-0.5%.
Bajaj Finance’s long-term guidance for Return on Assets (RoA) increased to 4.6-4.8% from the earlier guidance of 4-4.5%, while the Return on Equity (RoE) long-term guidance rose to 21-23% compared to 19-21% earlier.
The company’s customer franchise expanded significantly, reaching 72.98 million, a 21% YoY growth. In Q1FY24, Bajaj Finance witnessed its highest-ever quarterly increase in customer franchise, adding 3.84 million customers.
The deposits book showed remarkable growth, rising by 46% YoY to ₹49,944 crore.
Bajaj Finance maintained a provisioning coverage ratio of 65% on stage 3 assets as of June 2023. Additionally, the capital adequacy ratio (including Tier-II capital) in Q1FY24 was at 24.61%, with Tier-I capital at 23.01%.
Despite these strong financials, the announcement of Q1 results resulted in a sharp drop in Bajaj Finance’s share price. However, the stock has seen a strong comeback on Thursday. The shares of Bajaj Finance are trading with 1.74% gains at Rs.7,555.85 apiece on NSE.