Bajaj Finance Ltd's Q4FY18 standalone net profit rises 60.5% yoy to Rs720.90cr : Beats Estimates

India Infoline Research Team | May 17, 2018 22:48 IST

The company’s standalone NII stood at Rs2,365cr, up 40.66% yoy but down 0.2% qoq.

Bajaj Finance Ltd Q4FY18

Standalone Results Q4FY18: (Rs. in cr)

Q4FY18 YoY (%)
NII 2,365 40.7
Net Profit (adjusted) 720.90 60.5

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Buy

Reco. Price

1845

Last updated on

09-May-2018



Bajaj Finance Ltd's Standalone revenue has improved by 33.2% yoy to Rs3,557cr. Its NII came at Rs2,365cr as against Rs1,686cr, which has improved by 40.3% yoy. Its net profit came above estimates at Rs720.9cr against Rs449cr, up 60.5% yoy. Its GNPA declined by 19bps qoq to 1.48% and NNPA has declined by 15bps qoq to 0.38% respectively.
  • Bajaj Finance’s net profit was higher due to superior asset quality performance, which led to lower provisions. 
  • Net Interest income for FY18 is up by 41% to Rs8,744cr from Rs6,186cr in FY17.
  • Bajaj Finance reports Assets Under Management (AUM) of Rs84,033cr for FY18, which is 34% growth yoy.
  • BAF reported 40% yoy AUM growth during the quarter driven by consumer, rural, and commercial segments.
  • Segment wise AUM break-up for FY18, Consumer Business - 46.6%, SME Business - 31.4%, Commercial Business - 14.7% and Rural Business - 7.3%.
  • Customer franchise as of March 31, 2018 is up by 30% to 26.22mn from 20.13mn as of March 31, 2017. The company has acquired 6.1mn new customers in FY18.
  • The company has acquired 1.41mn new customers during Q4FY18.
  • New loans booked during Q4FY18 is up by 51% to 3.78mn from 2.50mn in Q4FY17. New loans booked during FY18 is up by 52% to 15.32mn from 10.09mn in FY17.
  • BAF remains focused on making the loan portfolio more granular through footprint expansion and increased focus on direct sourcing for better risk management.
  • The company added 215 new locations in 4QFY18. The company aims to increase footprint to 1,550 locations by FY19 from 1,332 locations as of FY18.
  • BAF intends to grow the rural lending business with better risk management through footprint expansion. The company would expand geographic presence from 602 branches across top 10 states as of FY18 to ~16 states by the end of FY19E.
  • BAF indicated that there is still huge potential to sustain growth momentum in the consumer durable segment and ~35% of the consumer finance customers as of 4QFY18 were new-to-credit.
  • BAF indicated that there is no major structural shift in the segment and the new-to-credit customer acquisition ratio has been consistent at similar levels over the past three years.
  • The company has presence across 730 locations with 57,000+ distribution point of sale for consumer durables, which has helped in higher customer acquisition rates.
  • Going forward, BAF intends to focus on cross-sell to drive growth. The company has an existing pool of ~15.43mn franchise customers eligible for cross-sell as of 4QFY18.
  • The company has expanded its presence in 215 new locations in the current quarter and is now present in 1,332 locations. It expects the geographic expansion to continue at 15-20% annual growth rate.
  • Total roll backs to standard assets increased 46% qoq to Rs140cr in 4QFY18. The increase was driven by improvement in asset quality across segments.
  • Management, however, indicated higher SME rollbacks over the next two-three quarters due to the lag effect.
  • BAF sold loans worth Rs64cr in Loan against Property (LAP) and Home Loan (HL) portfolio in 4QFY18.
  • Loan losses and provisions for FY18 is up by 28% to Rs1,030cr as against Rs804cr in FY17.
  • Capital adequacy ratio (including Tier-II capital) as of March 31, 2018 stood at 24.71%. The Tier-I capital stood at 19.68%.
  • Deposit book stood at Rs7,569cr as of March 31, 2018 at 12% of the standalone borrowings.
  • Provision coverage ratio for FY18 stood at 75%.
  • The Board of Directors has recommended a dividend of Rs4 per equity share of the face value of Rs2 (200%) for FY18.


Technical View:

Bajaj Finance Ltd is currently trading at Rs. 2,027.35, up by 108.7 points or 5.67% from its previous closing of Rs. 1,918.65 on the BSE.
The scrip opened at Rs. 1,930 and has touched a high and low of Rs. 2,045 and Rs. 1,906.55 respectively. So far 39,78,892 (NSE+BSE) shares were traded on the counter. The stock is currently trading below its 50 DMA.


***Note: This is a NSE Chart

 

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