Bajaj Finance tested lifetime high after announcements of Q3FY16 results.

Bajaj Finance Limited (BFL), a Bajaj Group company which focuses on consumer durables; SME; and commercial financing, reported a great set of Q3FY16 numbers, foregoing the analyst expectations. The company’s Net Interest Income (NII) stands at Rs. 1,320 crore, a growth of 48% Y-o-Y and 33.16% Q-o-Q; whereas it has seen a strong 58% Y-o-Y and 46% Q-o-Q jump in net profit at Rs 408 crore for Q3FY16. It has seen growth in all three categories of business. Consumer business grew by 43 percent; SME grew by 32 percent; and commercial grew by 51 percent.

The company has seen rise of 41% Y-o-Y  & 14.5% Q-o-Q in Assets under Management to Rs. 43,452 Crores; with a Gross and Net NPA of 1.29% and 0.26% respectively; and provisioning coverage stands at 80%. During the quarter, the company sold NPA worth of Rs.82 crore. This helped improve Gross and Net NPA performance. Currently Capital adequacy ratio (including Tier-II capital) is at 19.54%. The tier I capital stands at 16.06%. The Company continues to be well capitalized to support its growth trajectory for next two to three years. Return on Assets and Return on Equity for Q3 FY16 were 1.0% and 5.8% (not annualized) respectively.

Overall it was the best quarter for the company considering last 2 years growth across all business segments of the company. Interest cost continues to remain significantly lower due to borrowing mix, which in the Q3FY16 stands at 47:47:06 between banks; money markets; and retail deposits respectively. Going forward management expects asset quality to remain reasonably stable and range bound between 1.3% - 1.45% on short to medium-term, and should continue to harness a 25% asset Under Management (AUM) growth despite the fact that for a nine months basis it has seen 40% growth so far.

On nine month financials, BFL Net Interest Income (NII) grew by 41 per cent to Rs 3,305 crore in 9MFY16 as compared to same period in previous financial year. However, the company's PAT grew by 44 per cent to Rs 964 crore in 9MFY16 as compared to same period in previous fiscal year.

After declaration of result on Feb 03 its share price increased by 9.86 per cent on bourses and closed at 6380.5. The share price of BFL declined by 1.3 per cent on bourses in early trades; and is trading at 6,298.45 on an intraday basis.

Bajaj Finance Limited (BFL) is a non-banking finance company engaged primarily in the business of financing. It is focused on five categories: consumer lending; SME lending; commercial lending; rural lending; and fixed deposits and fee based product distribution. Its consumer durable financing model includes digital products and lifestyle products. It’s also among top three two wheeler loan lenders in India focusing on semi-urban and rural markets, which currently contributes 38% of Bajaj Auto’s domestic two wheeler sales.