Bajaj Finance Q2 Results: Consolidated PAT Rises 28 Per Cent To Rs 3,551 Crore

Bajaj Finance's loan losses and provisions grew nearly 47 per cent year-on-year (YoY) in the quarter to Rs 1,077 crore, up from Rs 734 crore a year ago

Bajaj Finance, the non-banking lender, reported a smaller-than-expected rise in second-quarter (Q2) profit on Tuesday as provisions for bad loans increased. The company's consolidated profit after tax (PAT) jumped nearly 28 per cent to Rs 3,551 crore in the three months ended September 2023, missing analysts' average estimate of Rs 3,585 crore, according to LSEG data. 

Consolidated numbers include the businesses of the lender's subsidiaries, Bajaj Housing Finance and Bajaj Financial Securities. Loan losses and provisions grew nearly 47 per cent year-on-year (YoY) in the quarter to Rs 1,077 crore, up from Rs 734 crore a year ago. It also rose sequentially from Rs 995 crore in April-June. 

The RBI has been cautioning lenders about fast-growing personal loan categories for signs of nascent stress, urging them to adopt stronger risk management practices. The company's gross non-performing asset ratio deteriorated to 0.91 per cent at the end of September, from 0.87 per cent at the end of June.

Loan demand during the quarter stayed strong despite the RBI keeping its key lending rate steady for a fourth consecutive policy meeting. The central bank has raised interest rates by 250 basis points since May 2022. 

Bajaj Finance, in an update earlier this month, reported its new loan bookings climbed 26 per cent YoY in the quarter, while its deposits book jumped 39 per cent.

Bajaj Finance on Tuesday said it plans to acquire 26 per cent stake in Pennant Technologies for Rs 267.50 crore. Bajaj Finance, an NBFC arm of Bajaj Finserv, said the company entered into a binding term sheet with Pennant Technologies on October 16, 2023, for acquisition of up to 26 per cent stake in the latter.

The strategic investment aims to strengthen the company's technology road map, Bajaj Finance said in a regulatory filing. The acquisition is likely to be completed by December 30, 2023, it said. As part of the deal, 4,22,738 equity shares from promoters and existing shareholders of Pennant will be offered to Bajaj Finance.

Besides, 5,71,268 Compulsorily Convertible Preference Shares (Series A CCPS) of face value of Rs 100 each will go to Bajaj Finance. It added 3.58 million new customers in the period. Net interest income, the difference between interest earned on loans and paid on deposits, rose over 26 per cent to Rs 8,845 crore in the September quarter, while interest income jumped nearly 38 per cent.