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- 21 Oct 2022
- ICICIdirect Research
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BAJAJ FINSERV REPORTED A HEALTHY PERFORMANCE LED BY LENDING BUSINESS
BAJAJFINSV - 1628 Change: 21.00 (1.31 %)News:
· Consolidated topline growth came at 16% YoY to Rs 20802 crore, primarily led by healthy revival in lending business. Lower provisioning in lending business and profitability in life insurance led to consolidated earnings at Rs 1556.9 crore up 38.7% YoY
· In lending business, AUM growth at 30.8% YoY to Rs 218366 crore, led by with steady margins and steady opex & provision led to robust growth in earnings. GNPA & NNPA stood at 1.17% and 0.44% as of Q2FY23 as against 1.25% and 0.50% as of Q1FY23
· Gross written premium in general insurance declined 5% YoY to Rs 4781 crore. Excluding crop and government business, gross premium increased 13% YoY to Rs 3088 crore. Claim ratio improved YoY at 75.5% vs 77.6% in Q2FY22, despite one time impact of Rs 34 crore on account of court order in respect to 2020 crop season. Combined ratio (total expenses for an insurer to premium) stood at 99.8% vs 98.5% in Q2FY22 and 104.6% in Q1FY23, leading to underwriting loss at Rs 18 crore. Investment income came at Rs 468 crore which led to PAT of Rs 336 crore; down 21% YoY
· Life insurance gross written premium grew 9% YoY to Rs 4155 crore. NBP largely stood flat on YoY basis Rs 2235 crore, attributable to slower group saving business. Individual rate business grew 32% YoY, while group protection increased 5% YoY. Renewal premium up 21% YoY at Rs 1920 crore. NBP margin witnessed improvement, while controlled opex led to shareholders profit at Rs 159 crore. Solvency ratio at 532% as of Sept’2022. AUM grew 7% YoY to Rs 86907 crore
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Strong performance in lending AUM coupled with focus on digitization remains positive. However, subdued performance of general insurance had partially impacted consolidated earnings momentum.
Impact:
Neutral.