Bajaj Finance reports record Q3FY23 net profit at Rs 2,973 crore

Bajaj Finance Ltd, India’s largest consumer finance company, reported record quarterly net profits of Rs 2,973 crore for Q3FY23. The 40% growth in net profits yoy was driven by a sharp spike in the net interest income (NII) and a sharp fall in provisions and contingencies. For instance, the NII was up 24% yoy at Rs7,435 crore. This was triggered by a record 78.40 lakh loans in the quarter as well as the highest-ever customer accretion of 31.4 lakhs in the quarter. 

 

For FY23 overall, the customer accretion is estimated at 1.1 crore. While the sequential growth in AUM was relatively tepid, the AUM is up by 27% on a yoy basis at Rs2.30 trillion as of December 2022. For the FY23 overall, Bajaj Finance is on target to delivery AUM accretion of around Rs53,000 crore. 

 

Apart from the B2C segment, which has been the mainstay of Bajaj Finance, the disbursements in the business-to-business (B2B) segments also grew by 6% to Rs16,026 crore in Q3FY23. The big boost to the profits cane from the 20% lower provisioning at just Rs841 crore in the quarter as it expects the overall loan losses to be under 1.5% of average assets for FY23 as a whole. 

 

Bajaj Finance also improvement in asset quality in the quarter with gross non-performing assets (GNPAs) tapering by 3 basis points to 1.14%. The net NPAs also tapered by 3 basis points to 0.41%. However, one casualty in the quarter has been the cost of funds for Bajaj Finance going up by 23 basis points to 7.14%. This is largely on account of higher bond yields triggered by rising rates.

 

Bajaj Finance had total deposits of Rs42,984 crore as of end of Q3FY23. However, the good thing is that it has been able to pass on higher interest costs to customers.

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