Bajaj Finance (BAJFINANCE) Q4 15/16 earnings summary

Executive summary

• FY2016 delivered strong growth: AUM rose 36% to ₹44,229 crore, total income 36% to ₹7,384 crore, and PAT 42% to ₹1,279 crore.

• Receivables under financing increased 37% to ₹42,756 crore; net NPA was 0.28%, among the lowest in the banking and NBFC industry.

• Growth was supported by diversified lending, volume expansion, cost management and risk controls, despite tight credit conditions and sector stress.

Financial highlights

• Total income ₹7,383.48 crore, up 36% YoY; income from operations ₹7,304.31 crore, up 36%.

• Net interest income ₹4,456.81 crore, up 41%; PBT ₹1,964.57 crore, up 45%; PAT ₹1,278.52 crore, up 42%.

• Finance costs rose 30% to ₹2,926.86 crore; loan losses and provisions increased 41% to ₹542.85 crore.

• Basic EPS ₹242.30, up 35%; diluted EPS ₹238.83, up 34%; book value per share ₹1,386.87, up 45%.

• Operating costs were ₹1,949 crore, up 36%; FY2016 CSR expenditure was ₹21.36 crore.

Outlook and guidance

• Management expected higher growth in FY2017 and the start of an investment cycle, contingent on normal monsoons, infrastructure spending, investment activity and financing capacity.

• Management expressed confidence in continued strong performance, supported by established risk systems, analytics and a growth strategy focused on higher profitability and long-term shareholder value.

• The direct-to-customer retail mortgage transition was expected to support higher growth and improved financials from the next fiscal year, after near-term volume de-growth.