Bajaj Finance posted its earnings for Q3Fy21. Its consolidated net profit for the quarter was down 29% (YoY) at Rs.1146 crore, while NII fell 5% to Rs.4296 crore. The company said this was predominantly due to higher reversal of interest income at Rs 450 crore v/s Rs 83 crore in Q3FY20 and higher cost of liquidity surplus at Rs 213 crore v/s Rs 83 crore.
Worrisome is the write off of loans to the tune of Rs.1970 crore or 1.5% of its book and if you include the interest foregone, this write-off jumps to 2335 crore. The company has tried to placate worries buy saying that it has adequate provisions – Rs.1352 crore v/s Rs.831 crore (YoY) and it is expected to increase more in Q4.
New loans booked during Q3 FY21 were 6.04 million v/s 7.67 million (YoY).
Gross NPA and Net NPA as of 31 December 2020 stood at 0.55% and 0.19% respectively, as against 1.61% and 0.70% as of 31 December 2019.
The provisioning coverage ratio as of 31 December 2020 was 65%.
Provisioning coverage on stage 1 and 2 assets was 190 bps as of 31 December 2020.
Hon'ble Supreme Court, in a public interest litigation (Gajendra Sharma Vs. Union of India & Anr), vide an interim order dated 3 September 2020, has directed that accounts which were not declared NPA till 31 August 2020 shall not be declared as NPA till further order. Accordingly, the Company has not classified any accounts which were not NPA as of 31 August 2020, as per RBI norms, as NPA after 31 August 2020. However, if the Company had classified borrower accounts as NPA after 31 August 2020, the Company's Gross NPA and Net NPA ratio would have been 2.86% and 1.22% respectively.
Capital adequacy ratio (including Tier-II capital) as of 31 December 2020 stood at 28.18%.
The Tier-I capital stood at 24.73%.
The company has received RBI approval for issuance of cobranded credit card in association with DBS Bank (India) Limited.
The stock price surged over 4.5% to hit an intraday high at Rs.5210 and it is currently trading at Rs.5190 levels. Its 52-week high is at Rs.5372.75.