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Bajaj Finance June Quarter Profit Drops Over 19%, Shares Tumble

Bajaj Finance June Quarter Profit Drops Over 19%, Shares Tumble

Bajaj Finance on Tuesday reported a net profit of Rs 962.32 crore for the quarter ended June 30, despite a contingency provision of Rs 1,450 crore on account of the coronavirus crisis. That marked a decline of 19.49 per cent compared to the corresponding period a year ago. In a regulatory filing during market hours, Bajaj Finance said its revenue from operations came in at Rs 6,648.20 crore in the first quarter of current financial year, up 14.52 per cent compared to the year-ago period. Bajaj Finance shares fell more than 6 per cent after the announcement. 

The Pune-based non-banking financial company (NBFC) said the coronavirus pandemic and the consequent lockdown impacted its business operations considerably during the April-June period, leading to significantly lower business acquisition and constraints on recovery of dues from customers.

The company's new loans booked during the quarter ended June 30 declined by 76 per cent to 1.75 million compared to the year-ago period.

Net interest income - or the difference between interest earned and interest expended - rose 12 per cent to Rs 4,152 crore on a year-on-year basis.

Gross non-performing assets (NPAs) - or bad loans - as a percentage of total loans improved to 
1.40 per cent in the three-month period ended June 30, 2020, from 1.61 per cent in the previous quarter, and 1.60 per cent in the quarter ended June 30, 2019.

Bajaj Finance said its loan losses and provisions were at Rs 1,686 crore in the three months to June 30, as against Rs 551 crore in the first quarter of financial year 2019-20.

During the April-June period, Bajaj Finance made an additional contingency provision of Rs 1,450 crore for COVID-19, taking the overall contingency provision for the pandemic to Rs 2,350 crore by the end of June.

In a separate filing, Bajaj Finance said its board approved the appointment of vice chairman Sanjiv Bajaj as non-executive chairman with effect from August 1, in place of Rahul Bajaj.

Shares in Bajaj Finance fell as much as 6.43 per cent to Rs 3,220 apiece on the BSE, compared to their previous close of Rs 3,441.35.

At 1:42 pm, the Bajaj Finance stock traded 4.16 per cent lower at Rs 3,298.10 apiece on the bourse, underperforming the benchmark S&P BSE Sensex index which was up 1.46 amid gains across sectors.