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Bajaj Finance shares decline over 5% on weak September quarter update

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Bajaj Finance's new loans declined over 44 percent YoY to 36 lakh from 65 lakh in the year-ago period.

Bajaj Finance shares fell over 5 percent on Wednesday after the Non-Banking Financial Company's (NBFC) September quarter update reported weak figures. As per the company update, Bajaj Finance's new loans declined over 44 percent YoY to 36 lakh from 65 lakh in the year-ago period. New loans were at 50 lakh in the June quarter.
It added that the company's assets under management (AUM) grew 13 percent to Rs 1.37 lakh crore as of Q2FY21 versus Rs 1.36 lakh crore in the same quarter previous year.
Meanwhile, the overall customer base of the company stood at 4.41 crore as compared to 3.87 crore on a year-on-year basis and it acquired 12 lakh new customers in the September quarter, the BSE filing stated.
Bajaj Finance's decision to accelerate provisioning in Q2 further dented sentiment.
"The Company will continue to accelerate its provisioning for Covid-19 in Q2FY21 as well to further strengthen its balance sheet," it said.
The firm further reiterated that the company's liquidity position remains very strong with liquidity surplus at approximately Rs 22,300 crore as of 30 September 2020.
The deposit book, on the other hand, stood at approximately Rs 21,600 crore as of 30 September 2020 as compared to Rs 17,633 crore as of 30 September 2019.
ICICI Securities, in a recent note, stated that collections focus, cautious disbursements may have impacted growth, however, the higher credit cost guidance may keep earnings muted. It added that the NBFC has also lost market share amid the COVID-19 pandemic.
The stock fell as much as 5.4 percent to Rs 3,286 per share on BSE after posting the update. In the last one month, it has declined 5 percent, as compared to a 3 percent rise in benchmarks.

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