Bajaj Finance

Bajaj Finance's net profit rose 60.0% to INR 39,950 mil in 2018

By Helgi Analytics - November 6, 2019

Bajaj Finance made a net profit of INR 39,950 mil under revenues of INR 118,615 mil in 2018, up 60.0% and 45.9% respectively compared...

Bajaj Finance's net interest income rose 39.5% to INR 97,252 mil in 2018

By Helgi Analytics - November 6, 2019

Bajaj Finance generated total banking revenues of INR 118,615 mil in 2018, up 45.9% compared to the previous year. Histor...

Bajaj Finance's npls (as % of loans) rose 8.49% to 1.57% in 2018

By Helgi Analytics - November 6, 2019

Bajaj Finance's non-performing loans reached 1.57% of total loans at the end of 2018, up from 1.44% compared to the previous year...

Profit Statement 2016 2017 2018
Net Interest Income INR mil 51,971 69,716 97,252
Net Fee Income INR mil 2,477 3,424 10,378
Other Income INR mil 7,289 8,166 10,986
Total Revenues INR mil 61,737 81,305 118,615
Staff Cost INR mil 9,320 14,336 19,409
Operating Profit INR mil 39,247 43,648 68,754
Provisions INR mil 8,182 2,214 3,962
Net Profit INR mil 18,364 24,964 39,950
Balance Sheet 2016 2017 2018
Interbank Loans INR mil 41,312 31,394 85,990
Customer Loans INR mil 554,459 791,025 1,125,130
Debt Securities INR mil 0 0 0
Total Assets INR mil 619,403 847,983 1,242,320
Shareholders' Equity INR mil 90,528 158,478 196,970
Interbank Borrowing INR mil 257,097 335,710 466,813
Customer Deposits INR mil 42,721 77,929 131,930
Issued Debt Securities INR mil 209,113 251,933 417,135
Ratios 2016 2017 2018
ROE % 22.3 20.1 22.5
ROA % 3.37 3.40 3.82
Costs (As % Of Assets) % 4.13 5.13 4.77
Costs (As % Of Income) % 36.4 46.3 42.0
Capital Adequacy Ratio % 20.3 24.0 20.7
Net Interest Margin % 9.54 9.50 9.31
Loans (As % Of Deposits) % 1,298 1,015 853
NPLs (As % Of Loans) % 1.61 1.44 1.57
Provisions (As % Of NPLs) % 149 132 115
Valuation 2016 2017 2018
Market Capitalisation (End Of Period) USD mil 9,424 15,955 25,003
Share Price (End Of Period) INR 1,174 1,789 3,003
Price/Earnings (P/E) 34.9 40.7 43.7
Price/Book Value (P/BV) 7.07 6.41 8.86
Dividend Yield % 0.307 0.226 0.198
Earnings Per Share (EPS) 33.7 43.9 68.8
Book Value Per Share 166 279 339
Dividend Per Share 3.61 4.05 5.96

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summary Unit 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
income statement                        
Net Interest Income INR mil           17,361 22,660 28,132 38,398 51,971    
Total Revenues INR mil           19,040 25,000 31,427 43,667 61,737    
Operating Profit INR mil           10,540 13,490 19,189 27,153 39,247    
Net Profit INR mil           5,910 7,190 8,979 12,786 18,364    
balance sheet                        
Interbank Loans INR mil ... ... ... ... ... ... ... 3,263 10,291 41,312    
Customer Loans INR mil           175,170 240,610 315,928 438,309 554,459    
Debt Securities INR mil ... ... ... ... ... 0 0 0 0 0    
Total Assets INR mil           178,063 246,180 327,798 469,731 619,403    
Shareholders' Equity INR mil           33,520 39,909 47,997 74,268 90,528    
Interbank Borrowing INR mil ... ... ... ... ... ... ... 83,811 61,807 257,097    
Customer Deposits INR mil           0 1,761 11,192 23,728 42,721    
Issued Debt Securities INR mil ... ... ... ... ... ... ... 182,735 308,439 209,113    
ratios                        
ROE %           21.8 19.6 20.4 20.9 22.3    
ROA %           4.10 3.60 3.13 3.21 3.37    
Costs (As % Of Assets) %           5.74 5.43 4.26 4.14 4.13    
Costs (As % Of Income) %           44.6 46.0 38.9 37.8 36.4    
Capital Adequacy Ratio % ... ... ... ...   22.0 19.1 18.0 19.5 20.3    
Net Interest Margin %           11.7 10.7 9.80 9.63 9.54    
Interest Income (As % Of Revenues) %           91.2 90.6 89.5 87.9 84.2    
Fee Income (As % Of Revenues) %           0.939 0.786 0.743 2.42 4.01    
Staff Cost (As % Of Total Cost) % ... ... ... ... ... 28.8 29.6 36.8 38.1 41.4    
Equity (As % Of Assets) %           18.8 16.2 14.6 15.8 14.6    
Loans (As % Of Deposits) % ... ... ... ... ... ... 13,662 2,823 1,847 1,298    
Loans (As % Assets) %           98.4 97.7 96.4 93.3 89.5    
NPLs (As % Of Loans) %           1.25 1.30 1.42 1.47 1.61    
Provisions (As % Of NPLs) % ... ... ... ... ... ... ... 90.6 85.7 149    
valuation                        
Market Capitalisation (End Of Period) USD mil ... ... ... ... ... ... ... 3,258 5,590 9,424    
Number Of Shares (Average) mil ... ... ... ... ... ... ... 505 535 545    
Share Price (End Of Period) INR ... ... ... ... ... ... ... 407 693 1,174    
Earnings Per Share (EPS) ... ... ... ... ... ... ... 17.8 23.9 33.7    
Book Value Per Share ... ... ... ... ... ... ... 95.0 139 166    
Dividend Per Share ... ... ... ... ... ... ... 1.79 25.0 3.61    
Price/Earnings (P/E) ... ... ... ... ... ... ... 22.9 29.0 34.9    
Price/Book Value (P/BV) ... ... ... ... ... ... ... 4.28 4.99 7.07    
Dividend Yield % ... ... ... ... ... ... ... 0.439 3.61 0.307    
Earnings Per Share Growth % ... ... ... ... ... ... ... ... 34.4 41.0    
Book Value Per Share Growth % ... ... ... ... ... ... ... ... 46.0 19.6    
income statement Unit 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
income statement                        
Interest Income INR mil           29,421 38,390 50,615 67,666 90,008    
Interest Cost INR mil           12,060 15,730 22,483 29,269 38,037    
Net Interest Income INR mil           17,361 22,660 28,132 38,398 51,971    
Net Fee Income INR mil           179 196 234 1,057 2,477    
Other Income INR mil           1,500 2,143 3,062 4,212 7,289    
Total Revenues INR mil           19,040 25,000 31,427 43,667 61,737    
Staff Cost INR mil ... ... ... ... ... 2,450 3,410 4,510 6,300 9,320    
Depreciation INR mil ... ... ... ... ... 200 290 360 560 710    
Other Cost INR mil ... ... ... ... ... 5,850 7,810 7,369 9,654 12,460    
Operating Cost INR mil           8,500 11,510 12,239 16,514 22,490    
Operating Profit INR mil           10,540 13,490 19,189 27,153 39,247    
Provisions INR mil           1,820 2,580 3,846 5,429 8,182    
Extra and Other Cost INR mil           0 0 1,773 2,077 2,891    
Pre-Tax Profit INR mil           8,720 10,910 13,570 19,647 28,174    
Tax INR mil           2,810 3,720 4,591 6,861 9,810    
Minorities INR mil           0 0 0 0 0    
Net Profit INR mil           5,910 7,190 8,979 12,786 18,364    
Dividends INR mil ... ... ... ... ... ... ... 903 13,387 1,969    
growth rates                        
Net Interest Income Growth % ...         32.7 30.5 24.1 36.5 35.3    
Net Fee Income Growth % ...         41.4 9.86 18.9 353 134    
Total Revenue Growth % ...         33.5 31.3 25.7 38.9 41.4    
Operating Cost Growth % ...         26.9 35.4 6.33 34.9 36.2    
Operating Profit Growth % ...         26.9 35.4 66.7 41.5 44.5    
Pre-Tax Profit Growth % ...         44.9 25.1 24.4 44.8 43.4    
Net Profit Growth % ...         45.6 21.7 24.9 42.4 43.6    
market share                        
Market Share in Revenues % ... ... ... ...   0.807 0.927 1.04 1.30 1.53   ...
Market Share in Net Profit % ... ... ... ...   0.998 1.33 1.65 3.11 ... ... ...
balance sheet Unit 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
balance sheet                        
Cash INR mil ... ... ... ... ... 4,164 7,768 2,298 13,309 3,262    
Interbank Loans INR mil ... ... ... ... ... ... ... 3,263 10,291 41,312    
Customer Loans INR mil           175,170 240,610 315,928 438,309 554,459    
Debt Securities INR mil ... ... ... ... ... 0 0 0 0 0    
Fixed Assets INR mil ... ... ... ... ... 1,762 2,199 2,525 2,903 3,660    
Total Assets INR mil           178,063 246,180 327,798 469,731 619,403    
Shareholders' Equity INR mil           33,520 39,909 47,997 74,268 90,528    
Of Which Minority Interest INR mil ... ... ... ... ... 0 0 0 0 0    
Liabilities INR mil           144,543 206,271 279,801 395,463 528,875    
Interbank Borrowing INR mil ... ... ... ... ... ... ... 83,811 61,807 257,097    
Customer Deposits INR mil           0 1,761 11,192 23,728 42,721    
Sight Deposits INR mil ... ... ... ... ... ... ... ... ... 42,721    
Term Deposits INR mil ... ... ... ... ... ... ... ... ... 0    
Issued Debt Securities INR mil ... ... ... ... ... ... ... 182,735 308,439 209,113    
Other Liabilities INR mil ... ... ... ... ... ... ... 2,063 1,489 19,944    
asset quality                        
Non-Performing Loans INR mil           2,190 3,128 4,844 4,156 9,824    
Gross Loans INR mil           175,170 240,610 320,315 438,345 569,133    
Total Provisions INR mil ... ... ... ... ... ... ... 4,387 3,560 14,674    
growth rates                        
Customer Loan Growth % ...         33.6 37.4 31.3 38.7 26.5    
Total Asset Growth % ...         50.9 38.3 33.2 43.3 31.9    
Shareholders' Equity Growth % ...         62.4 19.1 20.3 54.7 21.9    
Customer Deposit Growth % ... ... ... ... ... ... ... 535 112 80.0    
market share                        
Market Share in Customer Loans %           0.317 0.374 0.445 0.550 0.672   ...
Market Share in Total Assets %           0.205 0.243 0.294 0.372 0.436   ...
Market Share in Customer Deposits %           0 0.002 0.014 0.026 0.040   ...
ratios Unit 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
ratios                        
ROE %           21.8 19.6 20.4 20.9 22.3    
ROA %           4.10 3.60 3.13 3.21 3.37    
Costs (As % Of Assets) %           5.74 5.43 4.26 4.14 4.13    
Costs (As % Of Income) %           44.6 46.0 38.9 37.8 36.4    
Capital Adequacy Ratio % ... ... ... ...   22.0 19.1 18.0 19.5 20.3    
Tier 1 Ratio % ... ... ... ...   18.7 16.2 14.2 16.1 14.6    
Net Interest Margin %           11.7 10.7 9.80 9.63 9.54    
Interest Spread % ...         9.90 9.13 8.39 8.30 8.30    
Asset Yield %           19.9 18.1 17.6 17.0 16.5    
Cost Of Liabilities % ...         9.97 8.97 9.25 8.67 8.23    
Payout Ratio % ... ... ... ... ... ... ... 10.1 105 10.7    
Interest Income (As % Of Revenues) %           91.2 90.6 89.5 87.9 84.2    
Fee Income (As % Of Revenues) %           0.939 0.786 0.743 2.42 4.01    
Other Income (As % Of Revenues) %           7.88 8.57 9.74 9.65 11.8    
Cost Per Employee USD per month ... ... ... ... ... ... ... ... ... ... ...  
Cost Per Employee (Local Currency) INR per month ... ... ... ... ... ... ... ... ... ... ...  
Staff Cost (As % Of Total Cost) % ... ... ... ... ... 28.8 29.6 36.8 38.1 41.4    
Equity (As % Of Assets) %           18.8 16.2 14.6 15.8 14.6    
Loans (As % Of Deposits) % ... ... ... ... ... ... 13,662 2,823 1,847 1,298    
Loans (As % Assets) %           98.4 97.7 96.4 93.3 89.5    
NPLs (As % Of Loans) %           1.25 1.30 1.42 1.47 1.61    
Provisions (As % Of NPLs) % ... ... ... ... ... ... ... 90.6 85.7 149    
Provisions (As % Of Loans) % ... ... ... ... ... ... ... 1.39 0.812 2.65    
Cost of Provisions (As % Of Loans) %           1.19 1.24 1.38 1.44 1.65    
other data Unit 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
other data                        
Branches ... ... ... ... ... ... ... ... 659 915    
Employees ... ... ... ... ... ... ... ... ... ... ...  
Clients mil           8.10 10.1 12.9 16.1 20.1    
Sight (As % Of Customer Deposits) % ... ... ... ... ... ... ... ... ... 100    

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Bajaj Finance's net interest margin fell 2.07% to 9.31% in 2018

By Helgi Analytics - November 6, 2019

Bajaj Finance's net interest margin amounted to 9.31% in 2018, down from 9.50% compared to the previous year. Historically, the bank’s net interest margin reached an all time high of 18.6% in 2009 and an all time low of 9.31% in 2018. The average margin...

Bajaj Finance's price/earnings (P/E) rose 7.27% to 43.7 in 2018

By Helgi Analytics - November 6, 2019

Bajaj Finance stock traded at INR 3,003 per share at the end 2018 implying a market capitalization of USD 25,003 mil. Since the end of 2013, the stock has appreciated by % implying an annual average growth of 0 %. In absolute terms, the value of the company rose...

Bajaj Finance's capital adequacy ratio fell 13.8% to 20.7% in 2018

By Helgi Analytics - November 6, 2019

Bajaj Finance's capital adequacy ratio reached 20.7% at the end of 2018, down from 24.0% compared to the previous year. Historically, the bank’s capital ratio hit an all time high of 24.0% in 2017 and an all time low of 18.0% in 2014. The Tier 1 ratio amounte...

Bajaj Finance's share price (end of period) rose 67.9% to INR 3,003 in 2018

By Helgi Analytics - November 6, 2019

Bajaj Finance stock traded at INR 3,003 per share at the end of 2018 implying a market capitalization of USD 25,003 mil. Since the end of 2013, the stock has appreciated by % implying an annual average growth of 0 %. In absolute terms, the value of the company r...

Bajaj Finance's customer loan growth fell 1.01% to 42.2% in 2018

By Helgi Analytics - November 6, 2019

Bajaj Finance's customer loan growth reached 42.2% in 2018, down from 42.7% compared to the previous year. Historically, the bank’s loans growth reached an all time high of 42.7% in 2017 and an all time low of 26.5% in 2016. In the last decade, the averag...

Bajaj Finance's customer deposits rose 69.3% to INR 77,929 mil in 2018

By Helgi Analytics - November 6, 2019

Bajaj Finance's customer deposits reached INR 77,929 mil in 2017, up 82.4% compared to the previous year. Indian banking sector accepted customer deposits of INR 110,303 bil in 2017, up 3.61% when compared to the last year. Bajaj Finance accounted for 0.0...

Bajaj Finance's total revenues rose 45.9% to INR 81,305 mil in 2018

By Helgi Analytics - November 6, 2019

Bajaj Finance generated total banking revenues of INR 81,305 mil in 2017, up 31.7% compared to the previous year. Indian banking sector banking sector generated total revenues of INR 4,320,359 mil in 2017, up 7.41% when compared to the last year. ...

Bajaj Finance's customer loans rose 42.2% to INR 791,025 mil in 2018

By Helgi Analytics - November 6, 2019

Bajaj Finance's customer loans reached INR 791,025 mil in 2017, up 42.7% compared to the previous year. Indian banking sector provided customer loans of INR 88,362 bil in 2017, up 7.04% when compared to the last year. Bajaj Finance accounted for 0.895% of...

More News

Bajaj Finance is a diversified non-banking finance company (NBFC) with financing and fee income products across consumer, SME, commercial and rural segments. It started its operations as an auto finance company providing loans for two-wheelers and three wheelers and over the years has diversified into multi product financial businesses including accepting retail and wholesale deposits, or distribution of life insurance, general insurance and mutual funds. Headquartered in Pune the company's product offering includes lending to retail, SME as well as commercial customers financing consumer goods, home loans as well as of two-wheeler and three-wheeler loans, or gold loans. It has a diversified funding mix benefiting from AAA credit rating and rising share of retail deposits. As 70% of business is done with existing clients and the Company is increasingly using analytics when cross-selling new products, asset quality remains under good control and cost efficiency has been improving. At the end of September 2019, the Company was present in 956 locations with 83,200 points of sales. It had total of 38.7 mil clients at the end of September with 1.92 mil new clients gained last quarter. Bajaj Finance Ltd is a subsidiary of Bajaj Finserv, which holds 54.99% in the firm. Finserv also holds 74% each in two other subsidiaries, Bajaj Allianz General Insurance and Bajaj Allianz Life Insurance, which together constitute the financial assets of the group. Though accounting norms allow Finserv to add BFL’s sales to its consolidated revenue, the two companies are separate listed entities: Bajaj Finance has two 100% subsidiaries, Bajaj Housing Finance (registered with the National Housing Bank as a Housing Finance Company and Bajaj Financial Services.

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Finance

Bajaj Finance has been growing its revenues and asset by 39.5% and 38.3% a year on average in the last 3 years. Its loans and deposits have grown by 36.9% and 77.2% a year during that time and loans to deposits ratio reached 853% at the end of 2018. The company achieved an average return on equity of 21.6% in the last three years with net profit growing 46.2% a year on average. In terms of operating efficiency, its cost to income ratio reached 42.0% in 2018, compared to 41.6% average in the last three years.

Equity represented 15.9% of total assets or 17.5% of loans at the end of 2018. Bajaj Finance's non-performing loans were 1.57% of total loans while provisions covered some 115% of NPLs at the end of 2018.

Valuation

Bajaj Finance stock traded at INR 3,003 per share at the end of 2018 resulting in a market capitalization of USD 25,003 mil. Over the previous five years, stock price rose by 0% or 0% a year on average. That’s compared to an average ROE of 21.2% the bank generated for its shareholders. This closing price put stock at a 12-month trailing price to earnings (PE) of 43.7x and price to book value (PBV) of 8.86x in 2018.

Risks

The key risks related to Company’s business and valuation include a slowdown of loan growth on the back of macroeconomic problems, asset quality deterioration from unsecured lending, a pressure on loan yield on the back of rising competition pressure.