Bajaj Finance Q4 PAT up 25% on strong AUM, NII growth

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Bajaj Finance reported a net profit of Rs.2,837 crore for the fourth quarter of FY23, up 25 percent year-on-year driven by strong growth in Net Interest Income (NII) to Rs.7,104 crore – also higher by 25 percent.

For FY23, NBFC Retail recorded a 62 per cent increase in profit after tax to Rs.10,290 crore led by 30 per cent NII growth to Rs.26,401 crore. Assets AUM increased by 28 per cent YoY at ₹1.8-lakh crores, the company held management and macro overlay at ₹723 crores as of March 31st.

growth zones

On a post-earnings investor call, MD Rajeev Jain said 11 advances sectors experienced strong growth. The product mix has remained largely flat from the previous year and is not expected to change significantly in the future, he said, adding that NBFC will be able to grow comfortably while maintaining that mix.

Pegging AUM growth of 20 per cent, Jain said the company should be able to disburse around 350 lakh loans in FY24.

While retail growth is strong in line with the industry, Bajaj Finance is cautious about unsecured assets, with a market share of 7-8 per cent, as unsecured personal loans are “essentially a risky business rather than a budget activity.” public,” he said.

While on a net basis there is no impact on NIM (net interest margins) in FY23, there will be a gradual moderation in margins in FY24, Jin said, considering the impact of NIM for FY24 40-50 basis points assuming an increase other interest rate by the Reserve Bank of India.

“Part of it will be mitigated, if we take a comprehensive look at P&L, by getting to the peak operating metrics, which are the best credit metrics ever, that will be partially mitigated as well. So it should have little impact overall on the size of return on assets and return on assets. Shareholders’ equity “.

housing arm

The AUM assets of Bajaj Housing grew by 30 per cent year-on-year to Rs. 69,228 crore, with developer financing seeing the highest growth of 92 per cent. Jin said the vertical segment, which currently makes up 9 percent of the portfolio, will pick up and stabilize at 12-14 percent by industry standards.

He added that while there has been some normalization in growth, demand in the luxury and mid-range segment remains strong and the small book size gives the company enough room to grow even if there is some slowdown.

Bajaj Finance distributed 296 lakh loans in FY23, adding a record 116,000 new customers, of which 31 customers were added in Q4.

The significant spike in customer acquisition in the fourth quarter prompted increased capacity planning by the company in the last 120 days as business conditions improved. This includes increasing the number of employees in stores and the level of management over the past 60-75 days, which has shown significant results.