Q1 Concall summary (source: capital market):
The company has posted one of the strongest start of first quarter in the last few years. The businesses have continued to focus on granularity of the portfolio across product and geographies to reduce risk and augment profitability. It reflected in better margin, lower costs and better risk metrics in Q1FY19. The loan book of the company has surged 35% end June 2018 over June 2017.
Bajaj Housing Finance has become fully operational from February 2018. BHFL is progressing well and the company is confident that business will deliver high growth along with threshold ROEs.
The company has expanded its presence in the current quarter and is now present in 1,486 locations. It added 150 locations in Q1FY219, while expects geographic expansion to continue at 15%-20% annualized growth rate.
The Opex to NIM came is very strong aided by stronger fee momentum and better cost management. The company has guided at opex to NII of 40% for FY2019.
The company continued to manage its ALM well with a judicious mix of borrowings between banks, money markets and deposits. Liquidity and interest rates have hardened over last 90 days, while the company is well covered on ALM to manage any impact on P&L over short to medium term period.
Portfolio quality remained at its record best in Q1 FY19. With strong portfolio quality, the company is well placed to grow its business rapidly.
Company continues to expand user adoption of its Bajaj Finserv Mobikwik wallet to increase engagement with customers and increase repeat purchase rate. Bajaj Finserv Mobikwik wallet has 2.2 million active wallet users as of 30 June 2018, with their EMI card linked to the wallet.
The board of directors has approved purchase of 100% stake of Bajaj Financial Securities (BFINSEC), a 100% subsidiary of Bajaj Housing Finance and an indirect 100% subsidiary of Bajaj Finance. The strategy is to offer full product suite (demat & broking) to Loan against securities clients and grow profit pool of LAS business.
Total Slippages for the quarter were Rs 379 crore in Q1FY2019. The consolidated gross NPA and net NPA stood at 1.39% and 0.37% respectively end June 2018.