Bajaj Finserv Financial results –Q2FY18 – Total revenue­28% | Profit after tax­13%

A meeting of the Board of Directors of Bajaj Finserv Limited was held today to consider and approve the results for Q2FY18.

Bajaj Finserv Limited(BFS) is the holding company for the various financial services businesses under the Bajaj group. It serves millions of customers in the financial services space by providing solutions for asset acquisition through financing, asset protection through general insurance, family protection and income protection in the form of life and health insurance and retirement and savings solutions.

BFS participates in the financing business through its 55.13% holding in Bajaj Finance Limited (BFL) and in the protection business through its 74% holding in Bajaj Allianz General Insurance Company Limited (BAGIC) and Bajaj Allianz Life Insurance Company Limited (BALIC). During the quarter, BFL completed raising of capital from Qualified Institutional Buyers, consequent to which the shareholding of BFS reduced from 57.80% to 55.13%.

The results of these subsidiaries are reflected in the consolidated results of the Company.

Highlights – Q2 FY18 v/s Q2 FY17

• Consolidated total revenue –  `7,561crore   v/s   `5,920crore  ­28%
• Consolidated profit after tax –  `652crore   v/s   `576 crore­13%

 

• Bajaj Finance, profit after tax – `557crorev/s  `408crore  ­37%
• General insurance, profit after tax – `260crorev/s  `234crore ­11%
• Life insurance, shareholders’ profit after tax –`186crorev/s   `202crore

Highlights – H1 FY18 v/s H1 FY17

• Consolidated total revenue –  `  14,105crore   v/s   ` 11,150crore  ­27%
• Consolidated profit after tax –  `1,307crore   v/s   `       1,113 crore­17%

 

• Bajaj Finance, profit after tax – `1,159crorev/s  `           832crore  ­39%
• General insurance, profit after tax – `473crorev/s  `           366 crore  ­29%
• Life insurance, shareholders’ profit after tax –`382crorev/s   `           446crore

Summary of consolidated results is given in AnnexureA.

 Performance

 A synopsis on the performance of the individual companiesis given below:

1. Bajaj Finance Limited (BFL)

Despite slow credit demand across the industry, BFL has continued its stellar growth.

17. Total revenue for Q2FY18increasedby33%to`3,102crorev/s `2,341crore inQ2FY17.
18. Profit after taxfor Q2 FY18increasedby37% to`557crore v/s`408 crorein Q2FY17.

• Assets under management stood at `72,139croreas on30September2017 v/s `52,332 crore as on30September 2016- an increase of38%.

1. Net NPAas on 30September 2017stood at 0.51% after moving NPA recognition policy from4 months to 3 months overdue, as required by RBI guidelines.
2. After equity capital raising of ` 4,500 crore, capital adequacy ratio as on30 September 2017 (including Tier-II capital)stood at25.42%.The Tier-I capital stood at 19.86%.

Summary of financial results is given in AnnexureB.

 Bajaj Allianz General Insurance Company Limited (BAGIC)

During the quarter, BAGIC reported one of its best combined ratio and possiblythe best in General insurance industry. It recordedits highest ever quarterly gross written premium and profit after tax inQ2 FY18.

17. Gross written premium for Q2FY18increased by 31% to `2,857crorev/s`2,179 crore in Q2FY17.
18. During Q2 FY18, BAGICwrotecrop insurance of `1,145 crore v/s `737crore in Q2 FY17–an increase of 55%.

• Net earned premiumfor Q2 FY18 stood at`1,589crorev/s`1,240 crore in Q2 FY17 – an increase of 28%.

17. During the quarter, BAGIC registered robust operating performance.Underwriting profitfor Q2 FY18more than doubled to`138 crore v/s`57crore in Q2FY17.
18. Investment and other income for Q2FY18stood at`247 crorev/s `290 crore in Q2 FY17.Investment income for Q2 FY18 dropped on account of lower profit on sale of investments by`59 crore in Q2 FY18 as compared to Q2 FY17.
19. Profit after tax for Q2FY18increased by 11% to`260crore v/s `234 crore in Q2FY17.

• Claim ratio improved to9% in Q2FY18 v/s 71.6% in Q2FY17.
• Combined ratio improved to8% in Q2FY18 v/s 94.3% in Q2FY17.

1. As on 30 September 2017, solvency ratio stood at 288%, which is well above the normal regulatory requirement of 150%.
2. Cash and investments as on 30 September 2017 stood at `12,100 crorev/s `10,360 crore as on 30 September 2016–a healthy increase of17%.

Summary of financial results and key ratios is given in Annexure C.

 Bajaj Allianz Life Insurance Company Limited (BALIC)

BALIC has continued its focus towards selling more individual regular premium.BALIC’sratedindividual new business premium grewby32% in Q2FY18 as against industry growth of 23%.

1. New business premium stood at` 1,271 crorein Q2FY18v/s `800 crore inQ2FY17 – an increase of 59%.
2. Rated individual new business premium was ` 280crore in Q2 FY18 v/s `212crore in Q2 FY17 – an increase of 32%.
3. Group new business was ` 976crore in Q2 FY18 v/s `575crore in Q2 FY17.
4. Renewal premium for Q2FY18 was `745crorev/s`647 crore in Q2FY17 – an increase of 15%.

• Gross written premiumstood at `2,016 crore in Q2FY18v/s`1,447 crorein Q2FY17 – an increase of 39%.

17. Shareholders’ profit after tax during Q2FY18was `186crore v/s ` 202 crore in Q2FY17.
18. Solvency ratio stood at a healthy 608%(based on amended regulations)as on 30 September 2017 as against the minimum regulatory requirement of 150%. In addition to this, BALIC had a fund of ` 2,348crore held beyond required solvency margin forming part of shareholders’ investments.
19. Total investments stoodat `51,088croreas on30 September 2017v/s `46,880 crore as on 30 September 2016 – an increase of9%.

Summary of financial results is given in Annexure D.

2. Equity capital raising by Bajaj Finance

During the quarter, Bajaj Finance Limited raised ` 4,500 crore through Qualified Institutional Placement from Qualified Institutional Buyersby issuing equity shares of face value ` 2 each at a premium of ` 1,688 per share.

Sanjiv Bajaj                     

Managing Director

16October 2017