Bajaj Finance net profit zooms 88% YoY to ₹2,781 crore, asset quality sees improvement

• Bajaj Finance’s Q2 net profit grew 88% to ₹2,781 crore as compared to the same quarter last year.
• The NBFC reported an improvement in its asset quality, while new loan accounts increased 7% year-on-year.
• The company also reported a decline in provisions by over 43%, aiding in its profit growth.

Bajaj Finance today reported an 88% jump in its second quarter profit to ₹2,781 crore, as compared to the same quarter last year. Its net interest income (NII) increased by 31% to ₹7,001 crore in the same period.

Its total income rose 29% to ₹9,968 crore for the quarter from ₹7,731 crore in the year-ago quarter. Its total assets under management surged 31% to ₹2,18,366 crore.

Its asset quality witnessed a major improvement with net non-performing assets (NPAs) declining to 0.44% in the quarter from 1.1% a year ago, and 0.51% in Q1.

In an update earlier, Bajaj Finance revealed that its customer base has surged 19% year-on-year to 62.91 million. It also announced that deposits surged 37% in this period, while its company’s surplus liquidity fell 19% sequentially. This, according to analysts at Jefferies, will help support net interest margins during the quarter.

The company’s provisions also fell over 43% to ₹734 crore from ₹1,300 crore a year ago. New loan accounts grew 7% in the quarter.

The operating expenditure (Opex) to NII ratio – which explains how much the company has spent in its operations to earn its NII in the quarter – remained unchanged sequentially to 35.9%. It has seen an improvement from the year ago period, though, which was 38.1%.

Bajaj Finance expects to maintain its opex to NII ratio between 35-36% in FY23.

Bajaj Finance also said it is gradually passing on the higher interest rates to its customers.

The Jefferies report also recommended a ‘hold’ rating with a target price of ₹8,000 – an upside of 7.8% from the current share price.

Here’s Bajaj Finance’s Q2 in numbers:

Particulars	Q2 FY23	Q1 FY23	Q2 FY22
Total income	₹9,968 crore	₹9,283 crore	₹7,734 crore
Net interest income	₹7,001 crore	₹6,638 crore	₹5,337 crore
Net profit	₹2,781 crore	₹2,596 crore	₹1,481 crore

Source: Company reports

Overall, Bajaj Finance’s total employee count stood at 39,423, up from 37,873 in the previous quarter.

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