Bajaj Finance share price: Q3 FY21 performance highlights

Bajaj Finance’s New loans booked during Q3 FY21 were 6.04 mn as against 7.67 mn in Q3 FY20.  Customer franchise as of 31 Dec 2020 stood at 46.31 mn as against 40.38 mn as of 31 Dec 2019. Bajaj Finance acquired 2.19 mn new customers in Q3 FY21 as compared to 2.46 mn in Q3 FY20. Bajaj Finance’s Assets under management (AUM) as of 31 Dec 2020 were Rs 143550 cr as against Rs 145092 cr (YoY). Liquidity surplus as of 31 Dec 2020 stood at Rs 14347 cr as against 11384 cr as of 31 Dec 2019.

The cost of liquidity surplus for Q3 FY21 was Rs 213 cr as compared to Rs 83 cr in Q3 FY20. Bajaj Finance’s Net Interest Income (NII) for Q3 FY21 was Rs 4296 cr as against Rs 4535 cr in Q3 FY20. NII for the quarter was lower by Rs 239 cr as compared to Q3 FY20. This was predominantly due to higher reversal of interest income at Rs 450 cr vs Rs 83 cr in Q3 FY20 and higher cost of liquidity surplus at Rs 213 cr vs Rs 83 cr in Q3 FY20.

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Total operating expenses to net interest income for Q3 FY21was32.3% as against 33.8% in Q3 FY20. Total operating expenses for the quarter was lower by Rs 145 cr (or 9%) to Rs 1389 cr despite increase in recovery cost by Rs 58 cr. This reduction in operating expenses was on account of lower business volumes as well as measures taken to reduce operating expenses.

Bajaj Finance’s Loan losses and provisions for Q3 FY21 was Rs 1352 cr as against Rs 831 cr in Q3 FY20. During the quarter, the company has done one time write-off of principal outstanding of Rs 1970 cr and interest outstanding of Rs 365 cr on account of Covid-19 related stress. The Company holds a management overlay provision of Rs 800 cr as of 31 Dec 2020 for Covid-19 related stress.  Profit before tax for Q3 FY21 was Rs 1555 cr as against Rs 2170 in Q3 FY20. Profit after tax for Q3 FY21 was Rs 1146 cr as against Rs 1 614 cr in Q3 FY20.

Gross NPA and Net NPA as of 31 December 2020 stood at 0.55% and 0.19% respectively, as against 1.61% and 0.70% (YoY). The provisioning coverage ratio as of 31 Dec 2020 was 65%. Capital adequacy ratio (including Tier-II capital) as of 31 December 2020 stood at 28.18%. The Tier-I capital stood at 24.73%. The Company has received RBI approval for issuance of co branded credit card in association with DBS Bank (India).