India's Bajaj Finance beats Q1 profit view on robust loan demand
BENGALURU (Reuters) -Indian non-bank lender Bajaj Finance reported a bigger-than-expected increase in quarterly profit on Wednesday, boosted by healthy loan growth and strong customer additions.
The company's consolidated profit after tax rose a little over 32% to 34.37 billion rupees ($419 million) in the first quarter, beating analysts' average estimate of 33.24 billion rupees, according to Refinitiv data.
Bajaj Finance had already reported its new loan bookings grew 34% year-on-year in the quarter, while its deposits book jumped 46%, both rising more than they did in the previous quarter. It added 3.84 million new customers, its highest for any quarter ever.
Net interest income (NII), the difference between interest earned on loans and paid on deposits, rose 26% to 83.98 billion rupees, while interest income jumped nearly 37%.
"We expect gradual moderation in NII to continue through fiscal 2024," the company said in an investor presentation.
Its asset quality also improved, with gross non-performing assets (NPA) as a percentage of total loans improving to 0.87% at the end of June, from 0.94% at end-March.
Bajaj Finance expects its gross NPA to be 1.2%-1.4% in the long term but did not specify a timeline.
Despite April-June being a slow period historically for lenders, non-banking financial companies, or NBFCs, are expected to have benefited this time around from the robust momentum of strong disbursement activity in the previous quarter.
Last week, L&T Financial Holdings said its June-quarter profit doubled. Shriram Finance and SBI Cards and Payment Services will report later this week.
Bajaj Finance's assets under management (AUM) rose 9% sequentially to 499 billion rupees.
Its shares were down 2.2% on the day. They had surged nearly 39% since hitting a 52-week low in late March, while the Nifty financials index has risen 7% in the same four-month period. ($1 = 82.0050 Indian rupees)
(Reporting by Varun Vyas in Bengaluru; Editing by Savio D'Souza)
