India's Bajaj Finance beats Q1 profit view on robust loan demand (updated)

L&T Finance

26/07/2023 11:04

(Adds company comments in paragraphs 5 and 7, updates share
movement in paragraph 12)
       BENGALURU, July 26 (Reuters) - Indian non-bank lender
Bajaj Finance  BJFN.NS  reported a bigger-than-expected increase
in quarterly profit on Wednesday, boosted by healthy loan growth
and strong customer additions.
    The company's consolidated profit after tax rose a little
over 32% to 34.37 billion rupees ($419 million) in the first
quarter, beating analysts' average estimate of 33.24 billion
rupees, according to Refinitiv data.
    Bajaj Finance had already reported its new loan bookings
grew 34% year-on-year in the quarter, while its deposits book
jumped 46%, both rising more than they did in the previous
quarter. It added 3.84 million new customers, its highest for
any quarter ever.
    Net interest income (NII), the difference between interest
earned on loans and paid on deposits, rose 26% to 83.98 billion
rupees, while interest income jumped nearly 37%.
    "We expect gradual moderation in NII to continue through
fiscal 2024," the company said in an investor presentation. 
    Its asset quality also improved, with gross non-performing
assets (NPA) as a percentage of total loans improving to 0.87%
at the end of June, from 0.94% at end-March.
    Bajaj Finance expects its gross NPA to be 1.2%-1.4% in the
long term but did not specify a timeline.
    Despite April-June being a slow period historically for
lenders, non-banking financial companies, or NBFCs, are expected
to have benefited this time around from the robust momentum of
strong disbursement activity in the previous quarter.
    Last week, L&T Financial Holdings  LTFH.NS  said its
June-quarter profit doubled. Shriram Finance  SHMF.NS  and SBI
Cards and Payment Services  SBIC.NS  will report later this
week.
    Bajaj Finance's assets under management (AUM) rose 9%
sequentially to 499 billion rupees.
    Its shares were down 2.2% on the day. They had surged nearly
39% since hitting a 52-week low in late March, while the Nifty
financials index  .NIFTYFIN  has risen 7% in the same four-month
period. 
 
 ($1 = 82.0050 Indian rupees)

 (Reporting by Varun Vyas in Bengaluru; Editing by Savio
D'Souza)
 ((varunvyas.hebbalalu@thomsonreuters.com;))