Bajaj Finserv - Q4FY21 First Cut - ICICI Direct

(CMP - Rs. 10431, MCap - Rs. 166003 crore)

For Bajaj Finserv, lending business witnessed gradual pick up in AUM and earnings. Insurance business continued healthy traction on premium accretion and earnings.

Q4FY21 Earnings Summary

- Consolidated topline grew 15.7% YoY to Rs. 15387 crore, led by improved traction in insurance business which was partially offset due to moderation in lending business. On earnings front, improvement was witnessed in all the segments (insurance as well as lending) thereby consolidated earnings increased 4x YoY to Rs. 980 crore

- Consolidated AUM witnessed QoQ growth of 4% YoY to Rs. 152947 crore, with mortgages remaining the largest contributor. Subsequently, NII came at Rs. 4,659 crore vs Rs. 4,684 crore in Q4FY20 declining 1% QoQ. Lower provision at Rs. 1230 crore led to higher earnings at Rs. 1346 crore, up 42% YoY and 18% QoQ. Asset Quality has synced with proforma GNPA/NNPA by Q4 reaching at 1.79% / 0.75% (post ~Rs. 2000 crore i.e 1.3% w/off in Q4) from proforma GNPA and NNPA of 2.86% and 1.22% respectively in Q3FY21

- Gross written premium in general insurance increased by 5% YoY to Rs. 2787 crore. Excluding crop insurance (Rs. 124 crore vs Rs. 241 crore YoY), gross written premium increased 10% YoY to Rs. 2663 crore. On the expenses side, claim ratio increased to 64.3% vs. 62.1% in Q4FY20, primarily due to strengthening of reserves for third party motor claims. Therefore, combined ratio (total expenses for an insurer to premium) came at 96.6% vs 93.8% in Q4FY20. Higher claim provisioning led to lower underwriting profit came at Rs. 6 crore, though FY21 profit came at Rs. 237 crore. Investment income remained healthy at Rs. 353 crore, up 38% YoY

- Life insurance gross written premium grew 44% YoY to Rs. 4501 crore. Within premium accretion, NBP (new business premium) increased 64% YoY to Rs. 2493 crore, led by pick up in individual premium and group protection business. Individual rated premium grew 63% YoY to Rs. 989 crore, while group premium increased 34% YoY to Rs. 739 crore, led by pick up in loan disbursement. Renewal premium witnessed an uptick reporting 25% YoY growth to Rs. 2008 crore. New Business Value increased 59% YoY to Rs. 361 crore. AUM grew 32% YoY to Rs. 73773 crore, reflecting impact of rebound in equity markets and strong inflows

We would be shortly coming out with a detailed report.

Shares of BAJAJ FINSERV LTD. was last trading in BSE at Rs.10494.95 as compared to the previous close of Rs. 10085.7. The total number of shares traded during the day was 40086 in over 6676 trades.

The stock hit an intraday high of Rs. 10615.95 and intraday low of 10159.8. The net turnover during the day was Rs. 418408013.

Source : Equity Bulls

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