Bajaj Finance (BAJFINANCE) Q4 19/20 earnings summary

Executive summary

• FY2020 consolidated AUM rose 27% to ₹147,153 crore, new loans booked increased 17% to 27.44 million, and customer franchise grew 24% to 42.60 million.

• Consolidated PAT grew 32% to ₹5,264 crore despite higher impairments and COVID-19 disruption; lockdown halted business during the final seven days of FY2020.

Financial highlights

• Consolidated total income increased 43% to ₹26,386 crore; NII rose 42% to ₹16,913 crore and pre-provisioning operating profit grew 46% to ₹11,251 crore.

• Consolidated PBT increased 18% to ₹7,322 crore and PAT rose 32% to ₹5,264 crore; basic EPS was ₹89.77, up from ₹69.33.

• Impairment on financial instruments rose 162% to ₹3,929 crore, including a ₹900 crore COVID-19 contingency provision and a ₹483 crore accelerated charge for two identified large accounts.

Outlook and guidance

• FY2021 expected to be extremely demanding: business acquisition, customer debt relief, weakened servicing and recovery infrastructure, and debt servicing were identified as key challenges.

• Management expected a difficult H1, especially Q1 with April under full lockdown, and potential recovery in H2; cost pruning, efficiency gains and IT investment were planned to offset revenue pressure.

• Focus areas during the evolving crisis included capital preservation, balance-sheet protection, conservative liquidity management, operating expense control and stronger collections.