NIKHIL GUPTA MBA (G) DIV A AMF-27

Net profit up 33%, but growth continues to slow

Bajaj Finance has reported a strong increase in profitability during Q3FY13. Bajaj Finance reported 37% increase in its income from operations on a standalone basis to Rs.824.68 crore for the quarter ended December 2012 compared to corresponding previous year quarter, while other income surged to Rs.3.55 crore, leading to 37% increase in total income to Rs.828.23 crore. Interest expenses galloped 56% to Rs.320.86 crore. NII of the company increased 27% to Rs.507.37 crore. Operating expenses rose 23% to Rs.267.19 crore, pushing up operating profit by 33% to Rs.240.18 crore. Depreciation rose 8% to Rs.3.58 crore. PBT, as a result, rose 33% to Rs.236.60 crore. Effective tax rate was 32.3% compared to 32.4% in the corresponding previous year quarter. Net Profit was up 33% to Rs.160.09 crore.

AUM growing strongly

AUM surged 41%, on YoY basis, to Rs.16844 crore at the end December 2012 from Rs.11919 crore at end December 2011. Consumer segment AUM rose 43% to Rs.6895 crore, while SME AUM galloped 51% to Rs.7738 crore and Commercial segment AUM rose 10% to Rs.2211 crore. Customers acquired during Q3FY'13 were up 22% to 833280 from 684238 in Q3FY'12. Disbursement increased 12% to Rs.5200 crore in Q3FY'13 compared to Rs.4649 crore in Q3FY'12. Consumer segment deployments rose 37% to Rs.2948 crore, while SME deployments increased 23% to Rs.1521 crore. However, Commercial segment deployments dipped 42% to Rs.731 crore.

Asset Quality
Company as reported the strong asset quality with GNPA of 1.0% and NNPA of 0.2%. Loan losses and provisions (included in operating expenses) advanced 42% to Rs.51 crore. The provisioning coverage ratio stands at 80% as of 31 December 2012, compared to 81% at end December 2011.

Capital raising
The capital adequacy ratio of the company stood at 17.5% including the Tier-II ratio of 2.9%, as on 31 December 2012. Company has received SEBI approval to raise Rs.743 crore through issue of

6760117 equity shares of Rs.10 each. The company has fixed rights issue price of Rs.1100 with ratio of 3 shares for every 19 shares. The record date is 25 January 2013.

YTD Performance:
Company has reported 46%, on YoY basis, increase in its income from operations to Rs.2261.47 crore for the nine months ended December 2012, while other income of the company surged 43% to Rs.6.44 crore, helping total income to advance 46% to Rs.2267.91 crore. Interest expenses jumped 71% to Rs.879.22 crore. NII of the company gained 34% to Rs.1388.69 crore. Operating expenses rose 27% to Rs.745.57 crore, leading 43% growth in operating profits to Rs.643.12 crore for the nine months ended December 2012. Depreciation rose 19% to Rs.9.89 crore. PBT galloped 44% to Rs.633.23 crore. Effective tax rate was 32.5% compared to 32.4% in the corresponding previous year quarter. PAT of the company was up 43% to Rs.427.5 crore.

Bajaj Finance: Consolidated Results

Particulars Income from operations Other income Total Income Interest NII

1212 (3)

1112 (3)

Var. (%)

1209 (6)

1109 (6)

Var. (%)

1203 (12)

1103 (12)

Var. (%)

824.68 602.76 37 3.55 0.80 344

2261.47 1544.11 46 6.44 4.50 43

2163.02 1392.33 55 8.89 13.80 -36

828.23 603.56 37 320.86 205.12 56 507.37 398.44 27

2267.91 1548.61 46 879.22 512.71 71 1388.69 1035.90 34 745.57 586.62 27 643.12 449.28 43 9.89 8.30 19

2171.91 1406.13 54 746.18 371.01 101

1425.73 1035.12 38 811.74 613.99 11.77 602.22 195.78 406.44 94.94 655.61 379.51 9.64 369.87 122.91 246.96 57.69 24 62 22 63 59 65

Operating Expenses 267.19 217.67 23 Operating Profit Depreciation PBT Provision for tax PAT EPS*(Rs) 240.18 180.77 33 3.58 3.30 8

236.60 177.47 33 76.51 57.48 33

633.23 440.98 44 205.73 142.81 44 427.50 298.17 43 133.15 92.87

160.09 119.99 33 149.58 112.11

* Annualized on current equity of Rs.42.81 crore. Face Value: Rs.10 Figures in Rs. Crore Source: Capitaline Corporate Database