Retail-focused non-banking finance major Bajaj Finance today reported its best-ever quarterly numbers with a 54 per cent jump in net income at Rs 424 crore for the three months to June, boosted by a strong growth in retail and SME advances.
Bajaj Finance Managing Director Rajeev Jain attributed the good set of numbers to all-round growth in business led by retail finance and SME lending.
"Our consumer business clipped at 47 per cent in the June quarter while SME grew at 20 per cent, leading to the overall good growth which is the highest net profit we have ever declared," Jain told PTI in a concall from Pune.
The most profitable NBFC sounded confident of ending the year with a 25 per cent growth in balance-sheet, and 20 per cent growth in net income.
Jain said assets under management rose 40 per cent to Rs 49,608 crore, as its customer acquisition during the period grew 48 per cent to 25,40,540 from 17,19,125 a year ago. Total income grew 39 per cent to Rs 2,301 crore.
Though loan losses and provisions soared 75 per cent to Rs 180 crore, Jain explained that the increase in provisions was due to an accelerated additional coverage of Rs 19.1 crore to meet the forthcoming regulatory norms.
"In fact, our asset quality improved both from a gross and net NPA basis. While gross NPAs declined to 1.47 per cent, net NPA too improved to 0.41 per cent during the quarter.
"But the numbers are not comparable as the NPA detection period has come down to 120 days from the reporting quarter from 150 days a year ago after the Reserve Bank changed the NPA norms for NBFS," Jain said, adding in the June 2015 quarter the same stood at 1.25 per cent and 0.30 per cent from a 150 days perspective, respectively.
Had it not been for the additional provision of Rs 19.1 crore in its standard mortgage portfolio, NPA provisions would grown only 56 per cent, which are all standard provisions, he said.
On the recently launched innovative schemes like lifecare financing (launched late last year) the EMI financing (this June), Jain said, though the response has been very good, "it will take at least three-four years to make a real impact on the balance sheet. But we are very happy with the response we got so far".
These two schemes together added around 5,000 new
customers contributing to a little over Rs 2 crore in incremental income considering that the average ticket size is around Rs 40,000, he said, adding that the number can jump to 20,000 in the present quarter.
He also said the company has so far brought in as many as 24,000 retailers and 450 clinics/hospitals under these schemes thereby expanding the EMI card offerings to retail fashion, small appliances, apparel, eye-wear, accessories, and travel options in 15 cities now.
The EMI offering is available at various Future Group formats including Big Bazaar, Food Bazaar, Central, Brand Factory, Easyday, Foodhall, Fabfurnish.Com etc.
On fund raising plans, he said the company will continue to raise working capital loans and will continue to have a mix of bank funding (35 per cent) 7-8 per cent from FDs and the rest from other money market instruments.
Whether the company will be increasing its focus on the rural markets given the good monsoon coverage, he said Bajaj Finance makes only 3 per cent of its business from rural markets now and this may continue to be so going forward.
Brokerage Emkay Global said the numbers are well above the market estimate and has been led by strong growth, robust operating performance.
The shares of Bajaj Finance closed at Rs 875.10 apiece, up 9.75 per cent from previous close, on the BSE.
