Bajaj Finance Ltd Q4 Results Update

On 26th April 2022 Bajaj Finance announced its quarterly results for the last quarter of FY2022 and on Wednesday, 27th April 2022 the Bajaj Finance share price dropped by 6.15%.

Key Highlights:

Bajaj Finance Q4 Results for FY22 Declared

- For Q4FY22, Bajaj Finance reported strong core AUM growth of ₹ 10,837 crores. In FY22, the Company added ₹ 39,305 crores of core AUM. 

- The AUM as of 31 March 2022, grew by 29% at ₹ 1,97,452 crore as against ₹ 1,52,947 crore 2021. 

- In Q4FY22, the Company booked 6.28 MM new loans as against 5.47 MM in Q4 FY21. In FY22, new loans booked were 24.68 MM as compared to 16.88 MM in FY21. 

- The volume growth in B2B consumption businesses was 15% and disbursements growth was 27% for the last quarter. B2B disbursements were ₹ 13,187 crores in Q4FY22 as against ₹ 10,404 crores in Q4FY21. 

- In Q4, the cost of funds was 6.71%. The liquidity buffer stood at ₹ 10,110 crores as of 31 March 2022.

- The deposits book grew by 19% YOY to ₹ 30,800 crores as of 31 March 2022. Its contribution to consolidated borrowings stood at 19% as of 31 March 2022. 

- GNPA & NNPA stood at 1.60% and 0.68% for Q4FY22 as against 1.73% and 0.78% for Q3FY22. 

- The consolidated post-tax profit grew by 80% to ₹ 2,420 crores in Q4 FY22 as compared to ₹ 1,347 crores in Q4 FY21. 

- Capital adequacy remained strong at 27.22% as of 31 March 2022. Tier-1 capital was 24.75%. 

Bajaj Housing Finance Ltd:

- BHFL AUM grew by 37% to ₹ 53,322 crore as of 31 March 2022. The Company crossed a significant milestone of ₹50K crore AUM during Q4 FY22. 

- In Q4FY22, Net Interest Income grew by 22% to ₹ 452 crores from ₹ 369 crores in Q4FY21. 

- In Q4FY22, Opex to Net Interest Income stood at 32.5% as against 26.6% in Q4FY21. 

- In Q4FY22, loan losses and provisions were ₹ 38 crores as against ₹ 30 crores in Q4FY21. The company has maintained its management overlay provision at ₹ 211 crores as of 31 March 2022. 

- The gross NPA & net NPA stood at 0.31% and 0.14% as of 31 March 2022 as against 0.35% and 0.18% as of 31 December 2021.

- In Q4FY22, BHFL delivered a post-tax profit of ₹ 198 crores as against ₹ 179 crores in Q4FY21, a growth of 11%. 

- The capital adequacy of the company was 19.72% as of 31 March 2022. On 7 April 2022, Bajaj Finance infused capital of ₹2,500 crores in Bajaj Housing Finance to support its capital needs for the next 24 months.

Bajaj Financial Securities Limited :

- In Q4FY22, BFSL added 62K customers to its broking franchise. It's Retail and HNI customer franchise stood at 331K as of 31 March 2022. 

- Margin Trading Finance's book grew to ₹ 720 crores as of 31 March 2022 as against ₹ 184 crores as of 31 March 2021. 

- In Q4FY22, the total income for the company was ₹ 39 crores as against ₹ 17 crores in Q4 FY21. 

- In Q4FY22, Profit after tax was ₹ 9 crore as against ₹ 4.5 crores in Q4FY21.

Geography:

In Q4FY22, Bajaj Finance added 81 new locations to its distribution footprint. Total geographic footprint stood at 3,504 locations and 1,33,200+ distribution points. In FY22, the Company added 516 new locations. The Company continues to invest deeply in UP, Bihar, and the northeastern states.

Balance Sheet and Franchise: 

- The new loans booked increased by 46% to 24.68 MM for FY22 as against 16.88 MM for FY21. 

- Customer franchise increased by 19% to 57.57 MM as of 31 March 2022 as against 48.57 MM as of 31 March 2021. In the last quarter, Bajaj Finance added 2.21 MM, new customers, to its franchise. The company reported the highest ever customer franchise addition of 9 MM in FY22. Cross-sell franchise stood at 32.77 MM with a growth of 22% YoY.

Operating Efficiencies:

- Net Interest Income for FY22 was up by 27% to ₹ 21,892 crore as against ₹ 17,269 crores in FY21. 

- In Q4FY22, Opex to Net Interest income was 34.6%. The Company continues to invest in teams and technology for business transformation. 

Credit Cost 

- Loan losses and provisions (expected credit loss) for FY22 stood at ₹ 4,803 crores as against ₹ 5,969 crores in FY21. In FY22, loan loss to average receivables was 2.84%. The Company has a management overlay provision of ₹1,060 crores as of 31 March 2022.

Profitability and Capital 

- Profit after tax for FY22 grew 59% to ₹ 7,028 crores as against ₹ 4,420 crores in FY21. 

- The capital adequacy ratio (including Tier-II capital) as of 31 March 2022 stood at 27.22%. Tier-I capital stood at 24.75%. Consolidated leverage was 4.9X. 

Bajaj Finance remains one of the most capitalized companies in the financial sector among large companies.

 The Board of Directors has recommended a dividend of ₹ 20 per equity share of the face value of ₹ 2 (1000%) for FY22. This amounts to 19.07% of the Company’s standalone profit for FY22 and is in line with the Company’s dividend distribution policy. 

 ROA for FY22 was 4.2% and ROE was 17.4% despite carrying high capital and the impact of the ‘Delta’ wave on Q1 FY22.