Bajaj Finance Limited - 500034 - Shareholder Meeting / Postal Ballot-Notice of Postal Ballot
Pursuant to Regulation 30 and 50(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, please find enclosed the Postal Ballot Notice dated 18 January 2022.
Bajaj Finance’s Q3 is power packed, focus shifts to digital transformation
The market was anticipating a stellar Q3FY22 performance from Bajaj Finance. Analysts predicted robust numbers based on the company’s quarterly operational update. And boy did the company deliver. At a time, when NBFCs were still coping with growth challenges, Bajaj Finance’s net profits rose 85.5% YoY to Rs 2,125 crore with net interest income rising 40% YoY to Rs 6,000 crore. This non-banking finance company (NBFC) began its journey of recovery in Q2FY22 and the current quarter saw its profits and business growth return to pre-Covid levels. Asset quality improved with a corresponding increase in assets under management. AUM growth for the company is impressive as loan disbursements in Q3FY22 grew 23% YoY to 74.4 million. This led to a 23% YoY growth in its consolidated AUM to Rs 1.81 lakh crore. The company’s management is wary of a severe third-wave, but predicts that if this wave of the pandemic wanes quickly, business will continue to keep momentum. This is because Bajaj Finance’s asset quality has shown remarkable improvement since the beginning of FY22. In Q3FY22, gross NPA ratio fell 72 bps QoQ to 1.73%, while net NPA by 32 bps to 0.78%. The maximum contribution to the rise in AUM was by the mortgage lending segment. In Q3FY22, AUM for mortgage lending stands at Rs 58,304 crore Q3FY22 compared to Rs 46,758 crore in Q3FY21. Slippages or stage 1 NPA numbers are basically an indication of a loan becoming an NPA. This number reduced drastically for the company in FY22. In Q3FY22, slippage numbers are at Rs 3,972 crore whereas, the number was as high as Rs 29,273 crore in Q1FY22. This is an important metric as it helps understand how the company’s asset quality is maintained. Mortgage lending contributes the maximum to AUM mix Mortgage lending continues to thrive with a 25% YoY increase to Rs 58,304 crore. It constitutes 32% of the total AUM for Q3FY22. In terms of percentage growth, AUM for loan against securities grew the most at 80% YoY to Rs 9,127 crore, increasing its contribution to 5% of the total AUM from 4% in Q2FY22. This is followed by the rural B2B segment with 64% YoY growth to Rs 3,993 crore. The share of the consumer business remains steady but auto finance AUM fell 16.4% YoY to Rs 10,620 crore. Consumer B2C loans continue to grow due to rising online shopping as the segment records a 25% YoY increase in AUM to Rs 36,344 crore. Consumer B2B loans also fared extremely well in Q3FY22 growing at 46% YoY to Rs 14,920 crore. Bajaj Finance’s consumer and rural B2C segments comprise consumer durable loans, EMI cards, personal loan, gold loans, and salaried personal loan among others. Rural business (both B2B and B2C), small and medium enterprise lending, and commercial lending also showed decent growth during the quarter. Bajaj Finance’s rural B2B and B2C, and SME lending segments combined, consist of 23% of the total business mix, indicating that there is room for growth in rural markets. Auto industry sales were tepid over Q3FY22 and that led to Bajaj Finance’s auto finance business taking a hit. With the ongoing third wave of the pandemic and government restrictions in force in some states, the revival of the auto industry is going to be slow. This will probably mean that a meaningful revival in auto sales will be pushed forward to FY23. The management plans to tackle this problem by launching a new digital app to disburse two-wheeler loans, hoping to reach a wider customer base and improve auto finance sales. Net interest income for Q3FY22 shows a decent growth of 40% YoY to Rs 6,000 crore as there was a reduction in interest reversal to Rs 241 crore from Rs 322 crore in Q2FY22. The management expects this number to further reduce to pre-Covid levels in Q4FY22 to Rs 180-200 crore. Conservative provisioning, but a decent growth in profits The management is a little conservative on the provisioning bit as the third wave of the pandemic is raging. The company’s provisions were significantly reduced by 22% YoY to Rs 1,051 crore. With no adverse impacts of the third wave, the management plans to reduce provisions further in FY23. Net interest income rose 40% YoY to Rs 6,000 crore and NPAs are down, while cost of funds is down 5 bps to 6.72% in Q3FY22. NPAs continue to fall even after Bajaj Finance implements RBI’s new norms on NPA classification Although the new NPA norms kick in from March 31, 2022, Bajaj Finance decided to tweak their accounting books according to the new rules drafted by RBI. While reports did suggest that the new NPA norms might lead to an increase in bad loans, Bajaj Finance proved them wrong. Bajaj Finance’s asset quality improved quite a bit on a QoQ basis as its net NPA ratio fell 32 bps. According to analysts and the company’s management, these numbers are back to pre-Covid levels. So some semblance of normalcy has returned to the business. FY22 was a rough start for Bajaj Finance but the company’s NPA has been falling since. Even RBI’s new norms of NPA classification led to no negative impact on the numbers and gross NPAs significantly reduced. Digitalization initiatives and the roadmap ahead The digital initiatives do not excite some brokerages, such as HDFC Securities. It recently downgraded its rating for Bajaj Finance to 'Sell'. The reason the analysts offered is that they want to see some evidence of progress in the management’s digital initiatives, which is in its second phase of expansion. Bajaj Finance management says that phase-1 of digital transformation rolled out smoothly and the app is currently used by 1.65 crore customers. The company expects to add 80-90 lakh more customers once phase-2 goes live this week. New loan origination numbers are still below pre-Covid levels and the company is strategizing to deal with the problem head-on. The management is positive regarding further growth of business in Q4FY22 – January 2022 numbers to date look promising, and currently, there is no impact of the third wave of the pandemic on business momentum. There will however be better clarity on this once the January default rates, and collection efficiencies numbers emerge. For now, the company expects volumes to increase and bounce rates to stabilize in FY22. Bajaj Finance Limited - 500034 - Announcement under Regulation 30 (LODR)-Analyst / Investor Meet - Outcome
Transcript of Conference Call held in respect of the Financial results for the quarter ended 31 December 2021
Buy Bajaj Finance; target of Rs 9080: Motilal Oswal
Motilal Oswal is bullish on Bajaj Finance recommended buy rating on the stock with a target price of Rs 9080 in its research report dated January 19, 2022.
Market movers: CLSA continues with sell' on Bajaj Fin; Jefferies grows bullish on Apollo Hospitals
CLSA acknowledged that Bajaj Finance delivered a strong quarter, but valuation seems disconnected to them
Bajaj Finance shares give up entire early gains; settle over 2% lower
Bajaj Finance stock on Wednesday surrendered all its early gains and settled over 2 per cent lower on profit-taking. Bajaj Finance Limited - 500034 - Announcement under Regulation 30 (LODR)-Analyst / Investor Meet - Outcome
The audio recording of the conference call has been hosted on the website of the Company and can be accessed at https://www.bajajfinserv.in/finance-investor-relations-quarterly-earnings-conference-call
Bajaj Finance exceeds expectations in Q3, but stock's valuation already pricey
Going ahead, Bajaj Finance aims to achieve strong consumer momentum, better customer experience, and reduced cost and risk through its business transformation strategy Bajaj Finance Limited - 500034 - Shareholding for the Period Ended December 31, 2021
Bajaj Finance Ltd has submitted to BSE the Shareholding Pattern for the Period Ended December 31, 2021. For more details, kindly Click here Q3FY22 Quarterly Result Announced for Bajaj Finance Ltd.
Finance company Bajaj Finance Ltd declares Q3FY22 result: Bajaj Finance reports highest ever consolidated profit after tax off Rs 2,125 crore and highest ever quarterly Core AUM growth off Rs14,700 crore for the quarter ended 31 December 2021 New loans booked during Q3 FY22 were 7.44 million as against 6.04 million in Q3 FY21. Customer franchise stood at Rs 55.36 million as of 31 December 2021 as compared to 46.31 million as of 31 December 2020, a growth of 20%. The Company's customer franchise increased by 2.56 million in Q3 FY22 as compared to 2.19 million in Q3 FY21. Assets under management (AUM) grew by 26% to Rs 181,250 crore as of 31 December 2021 from Rs 143,550 crore as of 31 December 2020. Core AUM growth in Q3 FY22 was approximately Rs 14,700 crore. Net Interest Income (NII) for Q3 FY22 increased by 40% to Rs 6,000 crore as against Rs 4,296 crore in Q3 FY21. Interest income reversal for the quarter was Rs 241 crore as compared to Rs 450 crore in Q3 FY21. Total operating expenses to net interest income for Q3 FY22 was 34.7% as against 32.3% in Q3 FY21. Loan losses and provisions for Q3 FY22 was Rs 1,051 crore as against Rs 1,352 crore in Q3 FY21. During the quarter, the Company has done accelerated write offs of Rs 163 crore of principal outstanding on account of COVID-19 related stress. The Company holds a management and macro-economic overlay of Rs 1,083 crore as of 31 December 2021. Profit before tax for Q3 FY22 increased by 84% to Rs 2,868 crore from Rs 1,555 in Q3 FY21. Profit after tax for Q3 FY22 increased by 85% to Rs 2,125 crore from Rs 1,146 crore in Q3 FY21. Gross NPA and Net NPA as of 31 December 2021 stood at 1.73% and 0.78% respectively, as against 2.45% and 1.10% as of 31 September 2021. The Company has provisioning coverage ratio of 56% on stage 3 assets and 156 bps on stage 1 and 2 assets as of 31 December 2021. During the quarter, the Company has changed its NPA classification criteria from number of EMI outstanding to Days Past Due approach in line with the RBI circular dated 12 November 2021 "Prudential norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances Clarifications". This change did not have any negative impact on the Company's NPA. Capital adequacy ratio (including Tier-II capital) as of 31 December 2021 was 26.96%. The Tier-I capital was 24.44%. The Board of Directors has approved infusion of up to Rs 2,500 crore of equity share capital in BHFL to support its capital needs for next 24 months. The Board of Directors has approved infusion of up to Rs 400 crore of equity share capital in BFinsec to support its growth plans for next 24 months. STANDALONE PERFORMANCE HIGHLIGHTS: Assets under management (AUM) grew by 21% to Rs 132,913 crore as of 31 December 2021 from Rs 109,598 crore as of 31 December 2020. Net Interest Income (NII) for Q3 FY22 increased by 40% to Rs 5,553 crore as against Rs 3,977 crore in Q3 FY21. Interest income reversal for the quarter was Rs 232 crore as compared to Rs 456 crore in Q3 FY21. Loan losses and provisions for Q3 FY22 was Rs 995 crore as against Rs 1,245 crore in Q3 FY21. The Company holds a management and macro-economic overlay of Rs 880 crore as of 31 December 2021. Profit after tax for Q3 FY22 was Rs 1,934 crore as against Rs 1,049 crore in Q3 FY21 . Result PDF