Bajaj Finance (BAJFINANCE) Q4 20/21 earnings summary

Executive summary

• Pandemic disruption constrained loan acquisition; consolidated AUM grew 4% to ₹152,947 crore, while PAT fell 16% to ₹4,420 crore after elevated credit costs.

• H2 recovery strengthened, with sequential AUM growth of 5.5% in Q3 and 6.6% in Q4; stricter underwriting remained in place.

• Customer franchise rose 14% to 48.6 million; 16.88 million new loans were booked during FY2021.

Financial highlights

• Consolidated total income increased 1% YoY to ₹26,683 crore; net interest income rose 2% to ₹17,269 crore.

• Pre-impairment operating profit grew 6% to ₹11,961 crore; operating expenses fell 6% to ₹5,308 crore.

• Impairment on financial instruments rose 52% to ₹5,969 crore; PBT declined 18% to ₹5,992 crore and PAT fell 16% to ₹4,420 crore.

• Consolidated basic EPS was ₹73.58, down 18%; diluted EPS was ₹73.00, down 18%.

Outlook and guidance

• Q1 and Q2 FY2022 outlook remained difficult to predict amid the second COVID-19 wave; recovery depended on vaccination, infection control and operating conditions.

• Omnichannel transformation was targeted for phased completion from July to October 2021; Bajaj Pay customer launch was planned for Q1 FY2022.

• Recovery in Q3/Q4 AUM momentum supported confidence in regaining pre-pandemic growth, subject to continued risk calibration.

• Fifty financial inclusion branches in rural and backward areas were planned for FY2022.