Bajaj Fin Q4 hit by rural loan losses, RBI curbs
Tribunal, the Madras High Court and the Supreme Court and even made a failed attempt at selling the plant, but to no avail. Meanwhile, the company is awaiting CTO for its ESL Steel plant that it has put on the block, according to Misra. The company has received “attractive” offers for the plant that it acquired for ₹5,320 crore through a bankruptcy resolution process six years ago, he added. The company should get the CTO during the ongoing quarter, post which it expects to close the transaction in due course. The mining and resources major reported a sharp dip in its profits for the March quarter compared to the previous year due to lower commodity prices, higher borrowing costs and some exceptional charges.
It reported a profit of ₹1,369 crore attributable to the owners of the company. This was a 27% year-on-year decline.
Lower prices of metals such as aluminium and zinc during the quarter meant that the company’s top line dipped 6% year-onyear to ₹34,937 crore.
Earnings before interest, tax, depreciation and amortisation (Ebitda) dipped by a similar magnitude to ₹8,196 crore. Ebitda margin remained almost steady at 23.5%, dipping just 6 basis points compared to corresponding period last year.
The company’s borrowing cost during the quarter was 34% higher at ₹2,415 crore, hurting its bottom line.
This, after net debt went up to ₹56,338 crore as of 31 March, from ₹45,260 crore a year ago.
On Vedanta’s proposed demerger into six separately-listed companies, Misra said that the process is expected to be concluded by December.
It expects to receive the green light from 75% of its lenders by the end of May, which is a key criterion for its to receive Sebi’s blessings for the demerger.
Bajaj Finance’s managing director Rajeev Jain on Thursday said the company faced challenges on two fronts in the March quarter: higher loan losses in personal loans to rural customers, and the ongoing impact of Reserve Bank of India’s (RBI) restrictions on its business. Bajaj was speaking in a call with analysts after announcing the company’s latest quarter results.
Last November, RBI had asked the lender to stop giving fresh loans under its lending products eCOM and Insta EMI Card, citing non-compliance with digital lending guidelines.
Meanwhile, the consumer financier has been speaking cautiously about the rural b2c (business-to-consumer) segment that comprises personal loans to salaried, self-employed customers and professionals.
On rural b2c, the lender has, as a strategy, decided to go slow on growth. The assets under management (AUM) growth of rural b2c—excluding gold loans—have shrunk from 25% in March 2023 to 6% in March 2024. The AUM stood at ₹17,607 crore, comprising 5.3% of aggregate consolidated AUM as on 31 March, as against 6.7% in the same period last year. In fact, Bajaj Finance said that risk metrics across all businesses were stable except rural b2c.
For the quarter ended 31 March, Bajaj Finance posted a consolidated net profit of ₹3,825 crore, up 21% year-onyear, beating analyst expectations. estimates had pegged profit at ₹3,785 crore.