Bajaj Finance Limited

(fabregas) #512

Thanks for correcting my mistake.

I agree. Other players would be more adversely affected.

I was in Latur, Maharashtra recently and visited a Sony showroom to buy a TV for our family. It was a small showroom and it had a dedicated person for processing Bajaj Finance applications. The salesman said that about 80% of their customers use the no cost EMI option of Bajaj Finance. I saw a stack of 7-8 BFL loan applications on his table. Documents required - PAN, Aadhaar, bank statement/passbook and address proof. There were a few other offers from HDFC and ICICI bank, but people preferred the no cost EMI option. There was virtually no competition for Bajaj Finance at the showroom. This reminds me of a line frequently used by the MD in conference calls “Competition fizzles out outside the top 15-20 cities. That is where the growth opportunity is”.


Thanks for sharing this… Yes Bajaj has first mover advantage and they know how to exploit that :slight_smile:

(nil_71) #514

That means model is being replicated in tier 2&3 cities. A hugely aspiring demographies being catered to.

(mrai74) #515

(Abhishek Basumallick) #516

(Ranga Kiran) #517

(Abhishek Basumallick) #518

Q3 Results -

(Sandeep) #519

Splendid result in such a difficult environment for NBFCs. Reiterates the strength and market leadership of BFIN. Prudent step of the management by providing for the bad loans and containing them now itself rather than wait and watch. All in all, a happy outcome.

(fabregas) #520

Another set of impressive numbers by BFL. It is a gift that keeps on giving!

OPEX to NIM at 34.9% in Q3FY19 against 38.9% in Q3FY18. This ratio continues to fall.

@Sandeepg Can you explain this? How did you infer this from the quarterly earnings release?

(Sandeep) #521

Loan losses and provisions for the quarter at Rs 447.6 crore increased sharply by 44 percent sequentially and 61 percent year-on-year.

Asset quality deteriorated for the quarter ended December 2018. Gross non-performing assets (NPA) as a percentage of gross advances were higher at 1.55 percent against 1.49 percent in previous quarter. Net NPA, too, were higher at 0.62 percent in Q3 against 0.53 percent in Q2FY19.

Total slippages at the end of December quarter stood at Rs 715 crore, increased by 48 percent compared to Rs 483 crore at the end of September 2018.

Still BF has delivered impressive result which would have increased the market share as well. Very important to do this amidst the rising competition from companies making inroads into this space such as Capital first etc.


(Deepak Venkatesh) #523

Hi guys

As usual strong results from BajFin. I was inquisitive to know how the cost of funds fared given the September onwards ‘liquidity crisis’ and it seems they fared well on COF. In the last two quarter’s presentation they have given the below graph.

Another key point which came 10 days or so ago was a new set of regulations to ECB allowing upto $750 Mn borrowings per FY. This quarter’s presentation calls this out too.

New External Commercial Borrowing (ECB) guidelines dated 16 Jan 2019, issued by RBI, now makes BFL eligible to raise funds in foreign currency through ECB. This would help us diversify our liability profile further.

I was also interested to see the RBL co branded cards and EMI cards. They have the target of having 10L cards in force by FY end or April. It seems they will easily achieve this target. On the EMI card side in Q3 they had added fewer cards (0.1Mn less than Q2).


RBI circular for reference on ECB which came out last to last week.

I am having a major issue figuring the colours each quarter in charts such as the one below. Planning to write to the company :slight_smile:


(Subbu) #524

Thanks for sharing. I would read the colours in the order of the key.

(Krishnendu) #525

Gross NPA has increased due to higher provision but any thought why the net NPA has increased ?

(Varun) #527

GNPA increases due to bad loans. While NPA increases due to less provisions.

See NNPA = GNPA - Provisions


Overall the figures are very small as a percentage of total assets…

Provision coverage ratio @ 60% is very decent. It should not be a problem for BajFinance going forward.

I would worry in case the PCR slips below 50-55% which will indicate inadequate provisions and thereby excessive profits.

Disc: Invested.

(Sandeep) #528

Nicely explained. Thanks

(divyansh ) #529

Listen to Rajeev Jain of Bajaj finance. Key takeaways
  1. Cost of funds more or less same.
  2. Opex leverage kicking in ie top line getting converted into bottom line at a higher rate.
  3. He acknowledges that they have gained market share after q2 and is being modest that they are on their way to gain market share after the recent liquidity crisis.
  4. What encouraging is that he is confident of raising the balance sheet guidance for next year considerably. All this by a management which has under promised and over delivered .
    PS… Invested from sub 700 levels
    Will add on dips and price arnd 2200

(sincyvarghese) #530

This is one of the best run businesses and one of the most reasonable managements. Such humility in the interview. And they have such handle on their business. The good thing is there is no ambiguity, they know their stuff.

(Batterinram) #531

Rajeev Jain selling all his ESOPs after allocation not sure what to make of it

(rajput.delhi) #533

He’s been doing it for 5-6 yrs…like clockwork…selling all his ESOPs on grant. So quite possible that he thinks of leaving every year :slight_smile: