Bajaj Finance net profit jumps 27% to Rs 176 cr

Mumbai: Non-banking lender Bajaj Finance Thursday posted 27 percent growth in net profit at Rs 176 crore for the April-June quarter on account of healthy increase in disbursements.

It had posted net profit of Rs 139 crore in the same quarter of 2012-13 fiscal.

"We have been able to grow the business due to a growth of over 30 percent in disbursements and interest income," Bajaj Finance chief executive Rajeev Jain told PTI from Pune.

The net interest income of the Pune-based company, which is a big player in the two-wheeler financing space, rose 37 percent to Rs 601 crore, while disbursements jumped 32 percent to Rs 6,250 crore.

Company's provisions moved up 46 percent to Rs 41 crore during the reporting quarter, driven largely by a one-time hit of Rs 18 crore on account of a migration to providing 0.40 percent on standard assets.

Recently, the Reserve Bank had said that the standard asset provisioning for NBFCs would be increased to 0.40 percent from the current 0.25 percent.

"Though the new guidelines are yet to be notified, we have implemented it as a prudential measure," Jain said.

He said the company, which had earlier announced that it will be growing 20-25 percent on profit and assets under management, is now "cautiously optimistic" of meeting its target given the economic woes.

It will be cautious on the commercial vertical, which witnessed a fall of 21 percent in assets under management to Rs 1,856 crore, he added.

Its gross non-performing assets ratio moved up by 0.04 percent to 1.14 percent, with commercial and two-wheeler segments showing some stress.

The company scrip shed 2.47 percent at Rs 1,369.35 on the BSE, where the 30-share index, Sensex, ended the session with a gain of 0.90 percent.

Jain said the company, which has applied for a bank licence, is fully comfortable with requirements like having a fourth of the branches in rural areas and priority sector lending norms, adding that there will not be any regulatory forbearance on the same.

The company relies on the money market for 45 percent of its borrowing needs and hence, the recent liquidity tightening measures by the RBI will have a negative impact on the company, he said.

"It will be visible only starting the next quarter. If our cost of funds goes up, we will have to pass it on to our borrowers," he said, adding that in the recent few months, its cost of funds had improved by 0.07 percent.

PTI