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Axis Securities Report
Healthy operating metrics:
Bajaj Finance Ltd. added 3.23 million customers (+5/-16% YoY/QoQ) during the quarter versus 3.1/3.9 million customer YoY/QoQ, taking the total customer base to 83.64 million customers (+21/4% YoY/QoQ).
The company booked ~7.9 million loans during the qtr. (+4/-20% YoY/QoQ).
The new loans booked during the quarter were lower by approximately 0.8 million on account of the restrictions placed by the RBI, on sanction and disbursal of loans under 'eCOM' and 'lnsta EMI Card'.
Encouraging operational performance:
Net interest income grew by 28/5% YoY/QoQ, largely in line with our expectation, aided by assets under management growth of 34/6% YoY/QoQ while margins (calculated on average assets under management) contracted by ~19 bps QoQ.
Non-interest income grew by 12/4% YoY/QoQ, with healthy growth in fee income (~1.7% of average AUM, growing at +16/3% YoY/QoQ).
Opex grew by 25/5% YoY and cost-income ratio stood flat QoQ at ~34% QoQ. Pre- provision operating profit grew by 25/4% YoY/QoQ.
Credit costs remained steady at 1.63% vs 1.66% QoQ. Earnings growth was at 21/5% YoY/QoQ.
Asset Quality Steady:
Gross/net non-performing asset stood at 0.85/0.37% versus 0.95/0.37% QoQ.
Provision coverage ratio stood at 57%. Most segment ex-rural B2C continue to report healthy asset quality trends. Hence, the management has continued to adopt a cautious approach in growing the Rural B2C book.
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