Bajaj Finance shares slump 6% on Q1FY20 results

Bajaj Finance shares fell 6 per cent after the company’s Q1FY20 earnings failed to meet the street expectations. The shares of Bajaj Finance slumped 6 per cent to Rs 2,998 per share against the previous close of Rs 3,171.60 per share on BSE. Though the company posted a 43 per cent jump in its consolidated profits year-on-year basis, the provisions for Apr-Jun surged 69 per cent to Rs 551 crore from Rs 327 crore. 

Bajaj Finance Apr-Jun profit surged to Rs 1,195 crore as compared to Rs 836 crore in the same period of last year. The company’s assets under management or AUM surged 41 per cent to Rs 128,898 crore against Rs 91,287 crore in the same quarter of last year. New loans booked during Q1 FY20 rose by 29% to 7.27 million from 5.63 million. Gross NPA and net NPA, measures of asset quality, increased slightly on a quarterly basis.

Bajaj Finance’s net interest income for Apr-Jun was up by 43 per cent to Rs 3,695 crore from Rs 2,579 crore in the first quarter of the previous year.  Its total operating expenses to net interest income for Q1 FY20 was 34.98 per cent as compared with 37.02 per cent in the same quarter of the financial year 2018-19. Meanwhile, the company’s gross NPA and net NPA as of 30 June 2019 stood at 1.60% and 0.64% respectively of total advances. In the year ending March 2019, gross NPA and net NPA stood at 1.54% and 0.63% respectively. 

Bajaj Finance reported provisioning coverage ratio as of Jun 30, 2019, at 61 per cent. Its capital adequacy ratio (including Tier-11 capital) as of 30 June 2019 stood at 19.48% and tier-1 capital was at 15.48%, according to the exchange filing. Bajaj Finance’s balance sheet growth is likely to be 25-27% for FY20, its MD Rajeev Jain said in an interaction with CNBC TV18. According to him, Apr-Jun was a very good quarter considering the slowdown in the sector. 

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