Bajaj Finserv - Q4FY22 First Cut - ICICI Direct

(CMP - Rs. 15013, MCap - Rs. 238925 crore)

For Bajaj Finserv, pick-up in lending AUM & premium accretion aided topline. Lower profitability in insurance business offset by decline in provisioning.

Q4FY22 Earnings Summary

- Consolidated topline growth came healthy at ~22.6% YoY to Rs. 18862 crore, owing to strong revival in lending business and healthy performance in life insurance premium offtake. Lower provisioning in lending business was partially offset by lower profitability in insurance business, thus leading to consolidated earnings at Rs. 1346 crore; up 37.3% YoY

- Consolidated AUM witnessed YoY growth of 29% YoY to Rs. 197452 crore, which was primarily driven by 27% YoY growth in Consumer B2C while Consumer Sales finance business grew 30%, SME and Mortgage also saw steady 24% growth to Rs. 24979 crore and Rs. 61701 crore respectively. Led by strong AUM growth of 29% YoY, Bajaj Finance posted stellar earnings growth with NII growing of 30% YoY and 12.5% QoQ. Provisions for Q3FY22 declined 33% QoQ and 44% YoY to Rs. 702 crore, mainly due to improvement in asset quality. Asset quality performance was healthy as GNPA and NNPA declined by 13 bps and 10 bps QoQ to 1.60% and 0.68% respectively

- Gross written premium in general insurance increased 18% YoY to Rs. 3300 crore, including Rs. 429 crore of crop & government business compared to Rs. 96 crore in Q4FY21. Claim ratio increased YoY at 68.8% vs 64.3% in Q4FY21, mainly due to severity in non-Covid health claims, though sequentially claims have lowered. Led by higher claims, combined ratio (total expenses for an insurer to premium) came at 98.3% in Q4FY22, leading to lower underwriting profit at Rs. 9 crore. Investment income remained slower at Rs. 327 crore, leading to PAT of Rs. 248 crore vs Rs. 273 crore in Q4FY21

- Life insurance gross written premium grew 27% YoY to Rs. 5719 crore. Within premium accretion, NBP (new business premium) increased 30% YoY to Rs. 3236 crore, led by pick up in individual premium and steady group business. Individual rated premium grew 36% YoY to Rs. 1347 crore, while group premium remained broadly steady at Rs. 750 crore vs Rs. 739 crore in Q4FY21. Renewal premium witnessed an uptick reporting 24% YoY growth to Rs. 2483 crore. Higher new business strain and lower investment income impacted profitability which got reported at Rs. 48 crore in Q4FY22 vs Rs. 234 crore in Q4FY21. AUM grew 16% YoY to Rs. 85623 crore

We would be shortly coming out with a detailed report.

Shares of Bajaj Finserv Limited was last trading in BSE at Rs. 15013.80 as compared to the previous close of Rs. 14828.55. The total number of shares traded during the day was 15464 in over 4538 trades.

The stock hit an intraday high of Rs. 15256.60 and intraday low of 14660.85. The net turnover during the day was Rs. 231077290.00.

Source : Equity Bulls

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BajajFinserv INE918I01018 Q4FY22Result FirstCut ICICIDirect