Bajaj Finance Q1 Results: Profit Surges 32% to Rs 3,437 Crore; Stock Takes a Hit

Bajaj Finance

Mumbai, July 26, 2023, 5:24 PM IST: Bajaj Finance, a leading non-banking financial company (NBFC), has reported robust financial performance for the first quarter of the fiscal year 2023-24. The company’s net profit witnessed an impressive 32% year-on-year increase, reaching Rs 3,437 crore compared to Rs 2,596 crore in the same quarter last year. The remarkable growth in net interest income (NII) also grabbed attention, rising by 26% YoY to reach Rs 8,398 crore, up from Rs 6,640 crore in the corresponding quarter of the previous year.

One of the highlights of Bajaj Finance’s Q1 performance was the record-breaking number of new loans booked during the quarter. The company reported a staggering 34% surge in new loans, with 99.4 lakh loans booked in the June quarter, as opposed to 74.2 lakh loans in the year-ago quarter. This remarkable achievement marked the highest ever number of new loans disbursed by the NBFC in a single quarter.

In addition to strong loan growth, Bajaj Finance witnessed a significant increase in assets under management (AUM). The company’s AUM stood at an impressive Rs 2.70 lakh crore as of June 30. Furthermore, the company delivered its highest ever AUM growth of Rs 22,718 crore during the quarter.

Bajaj Finance attributed its success to the addition of 38.4 lakh new customers in the June quarter, indicating a growing customer base and trust in the company’s financial offerings. The Bajaj Finserv App also saw a surge in net users, with 4.02 crore users reported as of June 30.

To expand its reach and accessibility, Bajaj Finance expanded its presence by adding 95 new locations and increasing its distribution points by 12,500. As of June 30, the company’s geographic presence encompassed 3,828 locations, supported by over 1,67,000 active distribution points.

However, despite the impressive financial results, Bajaj Finance faced challenges in terms of cost of funds during the quarter. The cost of funds stood at 7.61%, showing a 22 basis points increase compared to the previous quarter, Q4 FY23. The NBFC acknowledged the impact on net interest income due to this development and expects a gradual moderation in NII to continue through FY24. Nevertheless, the company remains optimistic about its strong asset-liability management (ALM) and diversified balance sheet profile, which should help sustain its financial performance.

The market’s initial response to Bajaj Finance’s Q1 results was mixed, with the stock experiencing a dip in value. Investors closely watched the financial performance of the NBFC, leading to fluctuations in the stock’s value.

Bajaj Finance’s Q1 results demonstrate its resilience and continued growth in the face of economic challenges. The company’s focus on expanding its customer base, loan portfolio, and geographic presence has been integral to its success. With strong leadership and prudent financial management, Bajaj Finance is well-positioned to navigate the financial landscape and drive sustainable growth in the future.

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