Bajaj Finance (BAJFINANCE) Q4 16/17 earnings summary

Executive summary

• FY2017 delivered strong growth despite slower Indian GDP growth and demonetisation-related collection disruption; more than 10 million new loans were booked.

• AUM rose 36% to ₹60,194 crore, total income increased 36% to ₹10,003 crore, and PAT grew 44% to ₹1,837 crore.

• Performance was supported by product diversification, prudent operating costs, analytics, risk controls and low net NPA of 0.44%.

Financial highlights

• Standalone FY2017 total income was ₹10,003.31 crore, up 36% YoY; income from operations rose 37% to ₹9,977.36 crore.

• Standalone PBT increased 43% to ₹2,817.52 crore and PAT rose 44% to ₹1,836.55 crore; FY2016 PAT was ₹1,278.52 crore.

• Net interest income grew 41% to ₹6,200 crore; loan losses and provisions increased 51% to ₹818 crore.

• Operating costs rose 35% to ₹2,564 crore, while receivables under financing grew 33% to ₹56,832 crore.

• Consolidated FY2017 PAT was ₹1,836.38 crore versus ₹1,278.63 crore; subsidiaries’ operations remained small relative to the parent.

Outlook and guidance

• Management expected FY2018 real GDP growth of 7.4%-7.5% to be a creditable outcome; faster growth was viewed as a bonus.

• Management expected GST to have initial teething issues in its first two quarters, with overall benefits beginning in FY2019.

• The Chairman expressed confidence in achieving at least FY2017-level performance in FY2018, citing operating systems and management depth.