Bajaj Finance Jul-Sep Net rises 46% at Rs 408 crore

MUMBAI: The Pune-based non-banking finance company reported 46% jump in net profit during the second quarter of financial year, mainly due to growth in consumer finance and commercial finance segments.

During the quarter, profit after tax for grew to Rs 408 crore from Rs 279 crore in the corresponding period last year.

“Margins are getting compressed with banks competing in the retail lending space,” said Rajiv Jain MD and CEO Bajaj Finance. “We are walking away from dealing with distributors, doing more loans online and investing in technology and analytics to cross sell products to existing customers.”

Net interest income- difference between interest income and interest expended grew 40% to Rs 1,410 crore.

Consumer finance business grew 52% to Rs 23,892 crore and SME 14% to Rs 20,369 crore. Total asset under management grew 38% to Rs 52,332 crore.

The company is going slow in doing loan against property. This portfolio has shrunk 5% during the quarter, as Jain says competition has affected credit quality and lowered margins.

Asset quality remained stable with gross NPA and net NPA at 1.58% and 0.43% respectively. However, on a sequential basis, margins were up 7 basis points and 2 basis points.

The housing finance company will start operation in November.

Shares of Bajaj Finance closed 3.89% down from previous close to Rs 1,105 on BSE.