Published on 7/07/2022 12:40:42 PM | Source: Motilal Oswal Financial Services Ltd

Update on Bajaj Finance Ltd By Motilal Oswal

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Robust loan growth with healthy addition to customer franchise

New loans booked perhaps slightly below expectations because of absence of IPO financing

* BAF acquired 2.7m new customers, the highest ever quarterly increase in its customer franchise. Total customer franchise stood at 60.3m (up 19% YoY). New customer acquisition run-rate was healthy (up 2.7m) in 1QFY23.

* New loans booked rose ~61% YoY at 7.4m on account of the low base due to the second COVID wave. New loans booked stood at 7.4m, ~2% higher than that in 1QFY20, which was the last normal quarter of the fiscal unaffected by the COVID-19 pandemic.

* Reported core AUM stood at INR2.04t, up ~31% YoY and 6% QoQ. In 1QFY23, core AUM (total AUM adjusted for short-tenor IPO financing) grew by INR119b.

* Consolidated core AUM growth of 31% YoY suggests that disbursements were strong across product segments (including Auto Finance). Core AUM grew by ~6% QoQ. ? CRAR fell ~100bp QoQ to 26.2% (suggesting utilization of capital, led by strong growth).

* Deposit book stood at INR341b, up 22% YoY and 9% QoQ. The robust deposit growth of 9% QoQ was positive, suggesting BAF prioritized deposit growth in 1QFY23, when deposit growth seemed like it was slowing down in 2HFY22.

* Consolidated liquidity surplus stood at INR115.5b (v/s INR101b in 4QFY22). Surplus liquidity rose to 5.7% of core AUM (v/s 5.3% of core AUM in 4QFY22). BAF could have perhaps built upon the liquidity buffer in anticipation of a further rise in borrowing costs in subsequent months


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