Bajaj Finance: Q4FY14 Result Analysis

Bajaj Finance, the lending arm of the Bajaj Finserv group, has posted strong set of numbers for the quarter and year ended 31 March, 2014. The company's topline grew by 29% to Rs 1071 crore in Q4FY14 against Rs 832 crore in Q4FY13 and the customers acquired during Q4FY14 rose by 15% to 7,68,137 from 6,22,513 in Q4FY13. EBITDA of the company went up by 28% to Rs 717 crore in the said period from Rs 588 crore in Q4FY13.

Moreover, net interest income (NII) of the company recorded double digit growth of 25% and stood at Rs 645 crore in Q4FY14 as against Rs 515 crore during the same period last year. The interest expenditure of the company went up by 38% to Rs 450 crore in Q4FY14. Net profit of the company also showed a decent growth and went up by 11% to Rs 182 crore during the said period against Rs 163 crore in Q4FY13.

On the asset quality front, the company has disappointed the street as it recorded marginal increase in both, gross non-performing asset ratio (NPA) as well as net NPA ratio. Gross NPA ratio of the company came up to 1.18% in Q4FY14 from 1.15% in Q3FY14. Further net NPA ratio also showed similar trend and reached 0.28% during the said quarter as compared with 0.23% in last quarter of same fiscal year. Moreover provision coverage ratio reported sharp decline during the said quarter and came down to 76% from 80% in Q3FY14.

The company has recommended a dividend of Rs 16 per share for the fiscal year 2014, to be paid between July 21 and July 23.

Coming to annualized performance, the company performed well during the quarter as its total income went up by 31% during FY14 to Rs 4073 crore from Rs 3110 crore in FY13. On the other hand, customers acquired increased by 21% to 33,89,560 in FY14. Further, NII surged by 31% to Rs 2500 crore during the year from Rs 1904 crore in last fiscal year. Net profit of the company went up by 22% to Rs 719 crore in FY14 from Rs 591 crore in FY13.

At CMP of Rs 1808 per share, the stock is trading at 2.65x of its book value.