Bajaj Finserv Q4FY17

Financial results – Q4 and FY18

Highest ever annual profit . Fourth time in a row !

A meeting of the Board of Directors of Bajaj Finserv Limited was held today to consider and approve the results for Q4 and FY18.

The Board of Directors recommended a dividend of ` 1.75 per share – 35% (previous year – 35%). The total amount of dividend and tax thereon amounts to ` 27.85 crore (previous year ` 27.85 crore).

Bajaj Finserv Limited (BFS) is the holding company for the various financial services businesses under the Bajaj group. It serves millions of customers in the financial services space by providing solutions for asset acquisition through financing, asset protection through general insurance, family protection and income protection in the form of life and health insurance and retirement and savings solutions.

BFS participates in the financing business through its 54.99% holding in Bajaj Finance Limited (BFL), a Nifty 50 company and in the protection business through its 74% holding in two unlisted subsidiaries, Bajaj Allianz General Insurance Company Limited (BAGIC) and Bajaj Allianz Life Insurance Company Limited (BALIC).

From 2 April 2018, BFS too was included in the benchmark Nifty 50 index. BFL was included in the Nifty 50 index from 29 September 2017.

Yet again, BFL and BAGIC have had record years – BFL recorded its highest ever revenue and profit after tax while BAGIC registered its highest ever gross written premium and profit after tax. BALIC also stabilised to produce growth with profits. Consequently, the consolidated total revenue and profit after tax are also the highest ever.

Highlights – Q4 FY18 v/s Q4 FY17

• Consolidated total revenue                 – `    8,829 crore   v/s   `    7,040 crore  ↑ 25%
• Consolidated profit after tax                 – `       685 crore   v/s   `       535 crore  ↑ 28%

• Bajaj Finance, profit after tax                      – `       721 crore   v/s   `       449 crore  ↑ 61%
• General insurance, profit after tax             – `       187 crore   v/s   `       165 crore  ↑ 13%
• Life insurance, shareholders’ profit after tax       – `       171 crore   v/s   `       198 crore

Highlights – FY18 v/s FY17

• Consolidated total revenue                 – `  30,599 crore   v/s   `  24,508 crore  ↑ 25%
• Consolidated profit after tax                 – `    2,741 crore   v/s   `    2,262 crore  ↑ 21%
• Bajaj Finance, profit after tax                      – `    2,647 crore   v/s   `    1,837 crore  ↑ 44%
• General insurance, profit after tax             – `       921 crore   v/s   `       728 crore  ↑ 27%
• Life insurance, shareholders’ profit after tax       – `       716 crore   v/s   `       836 crore

Summary of consolidated results is given in Annexure A.

• • Bajaj Finserv Limited has recorded its fourth successive highest annual profit after tax on a consolidated basis.
  • Bajaj Finance Limited continues its outstanding growth story over last 10 years and has again recorded its highest annual profit after tax.
  • BAGIC, too has once again recorded its highest annual profit after tax and gross written premium by improving on the highest numbers recorded in the previous year.

• BALIC has also done reasonably well for FY18, recording strong growth in new business.

A synopsis on the quarterly performance of the individual companies is given below:

• Bajaj Finance Limited (BFL)

BFL enjoyed yet another strong year of performance aided by a diversified product mix, robust volume growth, prudent operating cost and effective risk management, continuing to deliver outstanding results quarter after quarter.

1. Total revenue for Q4 FY18 increased by 33% to ` 3,557 crore v/s ` 2,670 crore in Q4 FY17.
2. Profit after tax for Q4 FY18 increased by 61% to ` 721 crore v/s ` 449 crore in Q4 FY17.
3. Standalone assets under management (AUM) stood at ` 80,444 crore as on 31 March 2018 v/s                               ` 60,196 crore as on 31 March 2017 – an increase of 34%.

Bajaj Housing Finance Limited (BHFL), a 100% housing finance subsidiary of Bajaj Finance, which started its operations in July 2017 has become fully operational from February 2018. Its AUM as of 31 March 2018 stood at ₹ 3,589 crore.

Consolidated AUM of BFL as on 31 March 2018 increased by 40% to ` 84,033 crore from                    ` 60,196 crore as on 31 March 2017.

1. Net NPA as on 31 March 2018 stood at 0.38% after moving NPA recognition policy from 4 months to 3 months overdue in this financial year, as required by RBI guidelines.
2. The capital adequacy ratio as at 31 March 2018 (including Tier-II capital) stood at 24.71%.             The Tier-I capital stood at 19.68%.

Summary of financial results is given in Annexure B.

• Bajaj Allianz General Insurance Company Limited (BAGIC)

BAGIC continues to be amongst the most profitable general insurance companies.

1. Gross written premium (excluding crop) for Q4 FY18 increased by 22% to ` 2,184 crore v/s              ` 1,796 crore in Q4 FY17.

During Q4 FY18, BAGIC wrote crop insurance of ` 580 crore v/s ` 464 crore in Q4 FY17.

Consequently, overall gross written premium for Q4 FY18 increased by 22% to ` 2,764 crore v/s                  ` 2,260 crore in Q4 FY17.

1. Net earned premium for Q4 FY18 stood at ` 1,650 crore v/s ` 1,300 crore in Q4 FY17 –                       an increase of 27%.
2. Underwriting profit for Q4 FY18 stood at ` 30 crore v/s ` 35 crore in Q4 FY17.
3. Investment and other income for Q4 FY18 increased by 15% to ` 244 crore v/s ` 212 crore in Q4 FY17.
4. Profit after tax for Q4 FY18 increased by 13% to ` 187 crore v/s ` 165 crore in Q4 FY17.
5. Claim ratio stood at 67.9% in Q4 FY18 v/s 67.1% in Q4 FY17.
6. Combined ratio stood at 93.4% in Q4 FY18 v/s 92.7% in Q4 FY17.
7. As on 31 March 2018, solvency ratio stood at 276%, which is well above the minimum regulatory requirement of 150%.
8. Cash and investments as on 31 March 2018 stood at ` 14,823 crore v/s ` 10,829 crore as on       31 March 2017 – a healthy increase of 37%.

Summary of financial results and key ratios is given in Annexure C.

• Bajaj Allianz Life Insurance Company Limited (BALIC)

BALIC has continued its focus towards selling more individual regular premium policies. BALIC’s rated individual new business premium grew by 23% in Q4 FY18 as against industry growth of 10%.

1. New business premium stood at ` 1,394 crore in Q4 FY18 v/s ` 1,161 crore in Q4 FY17 – an increase of 20%.

1. Rated individual new business premium was ` 474 crore in Q4 FY18 v/s ` 386 crore in            Q4 FY17 – an increase of 23%.
2. Group new business was ` 900 crore in Q4 FY18 v/s ` 755 crore in Q4 FY17 –   an increase of 19%.

1. Renewal premium for Q4 FY18 was ` 1,276 crore v/s ` 1,087 crore in Q4 FY17 – an increase of 17%. Persistency for the 13th month improved significantly from 68% in FY17 to 77% in FY18.
2. Gross written premium stood at ` 2,670 crore in Q4 FY18 v/s ` 2,248 crore in Q4 FY17 –                  an increase of 19%.
3. Shareholders’ profit after tax during Q4 FY18 was ` 171 crore v/s ` 198 crore in Q4 FY17.  
4. Solvency ratio stood at a healthy 592% as on 31 March 2018 as against the minimum regulatory requirement of 150%.
5. Total investments stood at ` 51,970 crore as on 31 March 2018 v/s ` 49,270 crore                                              as on 31 March 2017.

Summary of financial results is given in Annexure D.

For the first time since their incorporation, the Boards of BAGIC and BALIC have declared dividends of 100% and 70% respectively. BFS will receive dividend of ` 82 crore and ` 78 crore from them respectively in FY2019 after approval by the shareholders of BAGIC and BALIC.

Annexure B – Summary financial results of BFL(standalone)

Annexure C – Summary financial results of BAGIC

Annexure D – Summary financial results of BALIC

* Rated new business premium = 100% of Regular premium + 10% of Single premium policies sold.