Bajaj Finance Q1 results: Profit falls 19% YoY to Rs 962 crore; firm provides further Rs 1,450 crore for Covid

Bajaj Finance on Tuesday posted a 19.40 per cent year-on-year (YoY) fall in consolidated net profit at Rs 962.32 crore for the quarter ended June 30. It had posted a net profit of Rs 1,195.25 crore in the corresponding quarter last year.

Analysts in an ETNow poll had projected the figure at Rs 970 crore.

The company said its business operations in Q1 FY21 were considerably impacted due to Covid-19 pandemic and the consequent lockdown which remained in force for the most of the quarter. It has resulted in significantly lower business acquisition and constraints on recovery of overdues from customers.


On the other hand, consolidated asset under management of the company increased 7 per cent YoY to Rs 1,38,055 crore during the quarter under review.

The NBFC major further added that the consolidated moratorium book has reduced to Rs 21,705 crore (or 15.7 per cent of AUM) from Rs 38,599 crore (or 27 per cent of AUM) as of April 30, owing to reduction in bounce rate coupled with better collection efficiency.

Bajaj Finance	Figures in Rs	% change (YoY)
Profit	962.32 crore	- 19.40
AUM	1,38,055 crore	+ 7
NII	4,152 crore	+ 12

During the quarter, the company made an additional contingency provision for Covid-19 of Rs 1,450 crore taking the overall contingency provision for Covid to Rs 2,350 crore as of 30 June 2020.

“The contingency provision for Covid-19 is now at 10.8 per cent of consolidated moratorium book. This contingency provision together with existing expected credit loss provision of Rs 623 crore provides an overall provisioning coverage of 13.7 per cent on the consolidated moratorium book,” Bajaj Finance said in a release.

The company had an overall liquidity surplus of around Rs 17,700 crore as of June 30 on a consolidated basis. However, the figure stood at Rs 20,590 crore on July 20.

Gross non-performing assets (NPA) and net NPA stood at 1.40 per cent and 0.50 per cent, respectively, as of June 30 against 1.60 per cent and 0.64 per cent last year.

New loans booked during Q1 declined 76 per cent YoY to 1.75 million against 7.27 million in the same quarter last year.

In a separate filing, the company said Rahul Bajaj, the current chairman of Bajaj Finance, has decided to step down from his position at the end of this month.

“Rahul Bajaj, non-executive chairman of the company, having been at the helm since its inception in 1987 and the group for over five decades, as part of succession planning, has decided to demit the office with effect from close of business hours on July 31, 2020”, Bajaj Finance said in release.

Rahul Bajaj will be replaced by his son Sanjiv Bajaj who is currently the vice chairman of the company from August 1. He also chairs the board of Bajaj Allianz Life Insurance Company and Bajaj Allianz General Insurance Company with effect since 2013. At the same time he is also the Managing Director of Bajaj Holdings & Investment.