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Bajaj Finance (NS:) reported a stable set of results across parameters. The NBFC reports an AUM growth of 27.4% YoY & 5.7% QoQ. The AUM witnessed a moderation in growth sequentially as the company focused on Margins over growth.
Growth was broad-based, except B2B, which lacked pace. Also, mortgage growth was slower on account of intense pricing pressure.
Mortgages/Securities Lending/SME Lending grew by 26%/45%/33% YoY. Overall, the product mix remained steady across its nine different segments. The management on its conference call stated that it plans to offer Micro-Finance loans and would first target UP and Bihar and then expand into other states.
The Net Interest Income (NII) of the company grew 25% YoY & 6.3% QoQ. The growth in NII was largely driven by the AUM growth. The Net Interest Margin (NIM) stood at 10.5% flat sequentially and compressed by 30 bps year-on-year. The company’s Cost of Funds stood at 7.14% up 23bps QoQ.
The Asset quality of the company continues to remain pristine and best-in-class. The GNPA stood at 1.1% vs 1.7% YoY & 1.2% QoQ. The NNPA stood at 0.4% vs 0.8% YoY & 0.4% QoQ. The company also witnessed improvement in its provision coverage ratio to 64% vs 62% sequentially.
The company reported a Net Profit of INR 2,973 crore up 39.9% YoY & 6.9% QoQ. The growth in Net profit was led by a high AUM growth and Lower provisions. The Provisions declined 20% YoY.
The cost/income ratio was flat and stood at 35%. The management indicated that most of the investment has been done and as operating leverage kicks in, the cost/income ratio is likely to decline going forward.
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