Bajaj Finance Q4 Review - Asset Quality Improves; Expect A Normalised FY22: Motilal Oswal

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Motilal Oswal Report

Bajaj Finance Ltd.’s Q4 FY21 profit after tax grew 42% YoY / 18% QoQ to Rs 13.5 billion (2% miss).

While net interest income beat our estimates by 7%, opex was 12% above our expectations.

With in-line provisions, profit after tax came in largely in line with our expectations.

For FY21, the company reported assets under management/net interest income/pre-provision operating profit growth of 4%/3%/6% YoY.

However, profit after tax declined 16% on the back of aggressive cleanup stress due to Covid-19.

The proforma gross non-performing loan ratio declined from 2.9% to 1.8% QoQ.

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