Bajaj Finance Ltd Q2FY21 consolidated PAT at Rs. 964.88 crore

Bajaj Finance Limited has reported financial results for the period ended September 30, 2020.

Financial Results (Q2 FY20-21) - QoQ Comparison

The company has reported total income of Rs.6523.29 crores during the period ended September 30, 2020 as compared to Rs.6649.74 crores during the period ended June 30, 2020.

The company has posted net profit / (loss) of Rs.964.88 crores for the period ended September 30, 2020 as against net profit / (loss) of Rs.962.32 crores for the period ended June 30, 2020.

The company has reported EPS of Rs.15.98 for the period ended September 30, 2020 as compared to Rs.15.93 for the period ended June 30, 2020.

Financials	Q2 FY20-21	Q1 FY20-21	% Change
Total Income	₹ 6523.29 crs	₹ 6649.74 crs	-1.9%
Net Profit	₹ 964.88 crs	₹ 962.32 crs	0.27%
EPS	₹ 15.98	₹ 15.93	0.31%

Financial Results (Q2 FY20-21) - YoY Comparison

The company has reported total income of Rs.6523.29 crores during the period ended September 30, 2020 as compared to Rs.6323.10 crores during the period ended September 30, 2019.

The company has posted net profit / (loss) of Rs.964.88 crores for the period ended September 30, 2020 as against net profit / (loss) of Rs.1506.29 crores for the period ended September 30, 2019.

The company has reported EPS of Rs.15.98 for the period ended September 30, 2020 as compared to Rs.25.89 for the period ended September 30, 2019.

Financials	Q2 FY20-21	Q2 FY19-20	% Change
Total Income	₹ 6523.29 crs	₹ 6323.10 crs	3.17%
Net Profit	₹ 964.88 crs	₹ 1506.29 crs	-35.94%
EPS	₹ 15.98	₹ 25.89	-38.28%

Financial Results (6 months ended FY 20-21) - YoY Comparison

The company has reported total income of Rs.13173.03 crores during the 6 months period ended September 30, 2020 as compared to Rs.12130.86 crores during the 6 months period ended September 30, 2019.

The company has posted net profit / (loss) of Rs.1927.20 crores for the 6 months period ended September 30, 2020 as against net profit / (loss) of Rs.2701.54 crores for the 6 months period ended September 30, 2019.

The company has reported EPS of Rs.31.92 for the 6 months period ended September 30, 2020 as compared to Rs.46.43 for the 6 months period ended September 30, 2019.

Financials	Half-Year Ended FY20-21	Half-Year Ended FY19-20	% Change
Total Income	₹ 13173.03 crs	₹ 12130.86 crs	8.59%
Net Profit	₹ 1927.20 crs	₹ 2701.54 crs	-28.66%
EPS	₹ 31.92	₹46.43	-31.25%

During the quarter, the Group has made an expected credit loss (ECL) provision on stage 1 and 2 assets of Rs. 1,370 crore taking the overall ECL provision on stage 1 and 2 assets to Rs. 5,099 crore as of 30 September 2020 as against Rs. 3,729 crore as on 30 June 2020. The ECL provision as a percentage of stage 1 and 2 assets is 3.59% as of 30 September 2020 as compared to 2.73% as of 30 June 2020 and 0.91% as of 30 September 2019. The Group continues to hold a management overlay of Rs. 2,260 crore as part of its ECL provision for stage 1 and 2 assets of Rs. 5,099 crore as at 30 September 2020.

Further, the Group. based on its estimate and judgement has reversed capitalised interest of Rs. 142 crore during the quarter ended 30 September 2020, taking the overall reversal for the half year ended 30 September 2020 to Rs. 361 crore.

Given the dynamic and evolving nature of the pandemic, these estimates are subject to uncertainty and may be affected by the severity, duration of the pandemic and other variables.

Key Highlights

- New loans booked during Q2 FY21 were 3.62 million as against 6.47 million in Q2 FY20.

- Customer franchise as of 30 September 2020 stood at 44.11 million as against 38.70 million as of 30 September 2019.

- Assets under management (AUM) as of 30 September 2020 grew by 1% to Rs. 137,090 crore from Rs. 135,533 crore as of 30 September 2019.

- Liquidity surplus as of 30 September 2020 stood at Rs. 22,414 crore as against Rs. 8,107 crore as of 30 September 2019. The cost of liquidity surplus for Q1 FY21 was approximately Rs. 220 crore as against Rs. 47 crore in Q2 FY20. The Company's liquidity position remains very strong.

- Net Interest Income for Q2 FY21 was up by 4% to Rs. 4,165 crore from Rs. 4,000 crore in Q2 FY20. During the quarter, as a measure of prudence, the Company has reversed capitalised interest of Rs. 142 crore. The total amount of interest income reversed in H1 FY21 was Rs. 361 crore.

- Total operating expenses to net interest income for Q2 FY21 was 27.8% as against 34.6% in Q2 FY20. With the onset of COVID-19 pandemic, the Company had taken significant measures to reduce operating expenses in April 2020. As a result, total operating expenses for Q2 FY21 was down by 16% to Rs. 1,160 crore from Rs. 1,384 crore. Total operating expenses for Q2 FY21 were lower by Rs. 224 crore on year on year basis.

- Loan losses and provisions for Q2 FY21 was Rs. 1,700 crore as against Rs. 594 crore in Q2 FY20. Consequent to the ongoing pandemic, the Company has further increased its provisions on stage 1 and 2 assets by Rs. 1,370 crore to Rs. 5,099 crore as of 30 September 2020 as against Rs. 3,729 crore as of 30 June 2020. The Company has strong pre-provisioning profitability to manage loan losses arising out of COVID-19.

- Gross NPA and Net NPA as of 30 September 2020 stood at 1.03% and 0.37% respectively, as against 1.61% and 0.65% as of 30 September 2019. The provisioning coverage ratio as of 30 September 2020 was 64%. Provisioning coverage on stage 1 and 2 assets was 369 bps as of 30 September 2020 versus 273 bps as of 30 June 2020 and as against 90-100 bps during pre-pandemic situation.

Hon'ble Supreme Court, in a public interest litigation (Gajendra Sharma Vs. Union of India & Anr), vide an interim order dated 3 September 2020, has directed that accounts which were not declared NPA till 31 August 2020 shall not be declared as NPA till further orders. Accordingly, the Company has not classified any accounts which were not NPA as of 31 August 2020, as per RBI norms, as NPA after 31 August 2020. However, if the Company had classified borrower accounts as NPA after 31 August 2020, the Company's Gross NPA and Net NPA ratio would have been 1.34% and 0.56% respectively.

- Capital adequacy ratio (including Tier-II capital) as of 30 September 2020 stood at 26.64%. The Tier-I capital stood at 23.01%.

Shares of Bajaj Finance Limited was last trading in BSE at Rs.3262.1 as compared to the previous close of Rs. 3266.9. The total number of shares traded during the day was 100920 in over 8567 trades.

The stock hit an intraday high of Rs. 3288 and intraday low of 3229. The net turnover during the day was Rs. 329188125.

Source : Equity Bulls

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