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Bajaj Finance Q3 results: Here are five key highlights

The non-banking finance company’s standalone profit after tax (PAT) rose 36 percent on-year to Rs 2,624 crore in the December quarter.

January 27, 2023 / 06:09 PM IST
The average estimate of a poll of five brokerages by Moneycontrol had put Bajaj Finance’s net profit at Rs 2,928 crore

The average estimate of a poll of five brokerages by Moneycontrol had put Bajaj Finance’s net profit at Rs 2,928 crore

 
 
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Bajaj Finance on January 27 reported healthy standalone third-quarter earnings with double-digit growth in the bottom line on strong growth in assets under management (AUM) and net interest income.

Here are the top five takeaways from the lender's Q3FY23 earnings:

Strong net profit

The non-banking finance company’s standalone profit after tax (PAT) rose 36 percent on-year to Rs 2,624 crore in the December quarter.

While, the consolidated PAT for Q3 FY23 increased by 40 percent to Rs 2,973 crore from Rs 2,125 crore in Q3 FY22.

The net profit is largely in line with analysts’ estimates.

The average estimate of a poll of five brokerages by Moneycontrol had put the lender’s net profit at Rs 2,928 crore for the quarter compared with Rs 2,125 crore reported in the corresponding quarter a year ago.

Also read: Bajaj Finance Q3 net profit surges 40% to Rs 2,973 crore, in line with estimates

Increased AUM

The lender's AUM grew 27 percent to Rs 1.69 lakh crore on a standalone basis from Rs 1.33 lakh crore in the December quarter of FY22.

On a consolidated basis, AUM grew 27 percent to Rs 2.31 lakh crore as of 31 December 2022, from Rs 1.81 lakh crore in the year-ago period.

New loans booked during Q3 FY23 were the highest ever at 7.84 million, the shadow lender said in a release.

Net interest income (NII)

The net interest income of the non-banking financier rose 24 percent on a consolidated basis to Rs 7,435 crore from Rs 6,005 crore in Q3 FY22.

“NII growth was 28 percent after adjusting NII of Rs 203 crore earned on IPO financing in Q3 FY22, which has since been discontinued due to change in regulation,” the release said.

According to Sharekhan estimates, NII was expected to increase by 23.4 percent Y-o-Y (up 5.3 percent Q-o-Q) to Rs 5,833 crore.

Also read: Bajaj Finance Q3 Net Profit seen up 38.7% YoY to Rs. 2,948 cr: Sharekhan

Improved asset quality

The asset quality of the non-banking finance company improved in the reporting quarter with gross non-performing assets (NPA) ratio improving 59 basis points on-year and net NPA ratio by 37 basis points.

Gross NPA and Net NPA as of 31 December 2022 stood at 1.14 percent and 0.41 percent, respectively, as against 1.73 percent and 0.78 percent as of 31 December 2021.

The company has provisioning coverage ratio of 64 percent on stage 3 assets and 116 bps on stage 1 and 2 assets as of 31 December 2022.

Loan losses and provisions for Q3 FY23 was Rs 841 crore as against Rs 1,051 crore in Q3 FY22.

“The company holds a management and macro-economic overlay of Rs 1,000 crore as of 31 December 2022,” it said.

Bajaj Housing performance

Bajaj Finance’s housing finance subsidiary reported a net profit increase by 81 percent to Rs 334 crore from Rs 185 crore in Q3 FY22.

Assets under management grew by 33 percent to Rs 65,581 crore as of December 31, 2022 from Rs 49,203 crore as of December 31, 2021.

Net interest income for Q3 FY23 increase by 49 percent to Rs 638 crore from Rs 429 crore in Q3 FY22.

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