Bajaj Finance Limited · NSE:BAJFINANCE
Bajaj Finance — Q2 FY24 Earnings Presentation
58 slides from Bajaj Finance's earnings presentation, Oct 17, 2023
Slide 1: Exchange filing cover letter for revised investor presentation
17 October 2023 THE MANAGER, THE MANAGER, BSE LIMITED LISTING DEPARTMENT DCS - CRD NATIONAL STOCK EXCHANGE OF INDIA LTD. PHIROZE JEEJEEBHOY TOWERS EXCHANGE PLAZA, C-1. BLOCK G, DALAL STREET, BANDRA - KURLA COMPLEX, BANDRA (EAST) MUMBAI - 400 001 MUMBAI - 400 051 SCRIP CODE: 500034 SCRIP CODE: BAJFIN
Slide 2: Q2 FY24 Investor Presentation
Q2 FY24 Investor Presentation 17 October 2023
Slide 3: Presentation Path
Presentation Path Section 01 Section 03 Section 05 Section 07 Executive Financial Customer franchise Update on summary – Q2 performance – Q2 and distribution credit quality FY24 3 FY24 28 reach 39 47 Section 02 Section 04 Section 06 Bajaj Finance Asset liability Business segment wise Limited overvie
Slide 4: Section 01: Executive summary – Q2 FY24
1.1 Quarter gone by Section 01 Executive summary – Q2 1.2 Lead financial indicators FY24 1.3 Omnipresence strategy update 3
Slide 5: Q2 FY24 Executive summary
Q2 FY24 Executive summary Good quarter across all financial and portfolio metrics. Delivered AUM growth of ₹ 20,167 crore, booked 8.53 MM new loans and added 3.58 MM new customers in Q2. As of 30 September 2023, Bajaj Finserv App has 44.68 MM net users. AUM Opex to NII PAT ROE Net NPA ₹ 290,264 34.0
Slide 6: Lead financial indicators (1/6)
Lead financial indicators (1/6) Balance sheet and business metrics 1. Delivered quarterly AUM growth of ₹ 20,167 crore in Q2. In the first half, the Company has added AUM of ₹ 42,885 crore. 2. AUM was up 33% at ₹ 2,90,264 crore as against ₹ 2,18,366 crore as of 30 September 2022.. 3. New loans booke
Slide 7: Lead financial indicators (2/6)
Lead financial indicators (2/6) Operating efficiencies 12. In Q2, Net interest income (NII) grew by 26% to ₹ 8,845 crore as against ₹ 7,002 crore in Q2 FY23. NIM compression in Q2 over Q1 was 14 bps. 13. In Q2, Opex to NII improved to 34.0% versus 35.9% in Q2 FY23. 14. Employee headcount stood at 51
Slide 8: Lead financial indicators (3/6)
Lead financial indicators (3/6) Profitability and capital 19. Consolidated profit before tax grew by 27% to ₹ 4,758 crore in Q2 FY24 as against ₹ 3,752 crore in Q2 FY23. 20. Consolidated profit after tax grew by 28% to ₹ 3,551 crore in Q2 FY24 as against ₹ 2,781 crore in Q2 FY23. 21. In Q2, the Comp
Slide 9: Lead financial indicators (4/6) – Bajaj Housing Finance
Lead financial indicators (4/6) Bajaj Housing Finance Limited (BHFL) BHFL - Balance sheet and geography 26. AUM was up 29% at ₹ 81,215 crore as against ₹ 62,931 crore as of 30 September 2022. 27. Home loans AUM grew by 20%, Loan against property grew by 4%, Lease rental discounting grew by 64%, Deve
Slide 10: Lead financial indicators (5/6)
Lead financial indicators (5/6) BHFL - Credit costs 38. In Q2, loan losses and provisions were ₹ 18 crore as against ₹ 30 crore in Q2 FY23. BHFL holds a management and macro- economic overlay provision of ₹ 176 crore as of 30 September 2023. 39. GNPA & NNPA stood at 0.24% and 0.09% as of 30 Septembe
Slide 11: Bajaj Financial Securities Limited (BFSL)
Lead financial indicators (6/6) Bajaj Financial Securities Limited (BFSL) 46. In Q2, BFSL added 33K customers to its franchise. Retail and HNI customer franchise stood at 618K as of 30 September 2023. 47. Margin Trading Finance AUM grew by 197% at ₹ 2,056 crore as of 30 September 2023 as against ₹ 6
Slide 12: Omnipresence strategy update
Omnipresence strategy update 11
Slide 13: Omnipresence metrics - Strong growth momentum across Geography and Digital metrics
Omnipresence metrics - Strong growth momentum across Geography and Digital metrics Particulars Unit Q2 FY23 Q1 FY24 Q2 FY24 YoY Geography New locations added – in the Qtr # 99 95 106 7% Locations - Cumulative # 3,685 3,828 3,934 7% Standalone Gold loan branches – Cumulative # 175 424 514 194% App Me
Slide 14: Omnipresence metrics - Strong growth momentum across Geography and Digital metrics
Omnipresence metrics - Strong growth momentum across Geography and Digital metrics Particulars Unit Q2 FY23 Q1 FY24 Q2 FY24 YoY App business metrics EMI cards acquired on App – In the Qtr # in ‘000 100 123 130 30% Personal loan disbursed on App – In the Qtr In ₹ Cr 2,391 2,760 2,910 22% Credit card
Slide 15: Customer franchise - Key financial metrics
Customer franchise - Key financial metrics H1 H1 Particulars Unit FY17 FY18 FY19 FY20 FY21 FY22 FY23 YoY FY23 FY24 New loans booked In MM 10.1 15.3 23.5 27.4 16.9 24.7 29.6 14.2 18.5 30% New customer addition In MM 4.1 6.1 8.3 8.1 6.0 9.0 11.6 5.3 7.4 39% Existing customer mix % 59.8% 60.3% 64.8% 70
Slide 16: Section 02: Bajaj Finance Limited overview
2.1 Bajaj group structure 2.2 What do we stand for 2.3 Key strategic differentiators Section 02 2.4 Our shareholder profile Bajaj Finance Limited 2.5 BFL Consolidated 16-years financial overview snapshot 2.6 BHFL 6-years financial snapshot 2.7 Product suite 2.8 Executive summary 15
Slide 17: Bajaj group structure
Bajaj group structure Bajaj Holdings & Investment Ltd (BHIL) (Listed) 1 2 39.06% 34.18% Bajaj Auto Ltd Bajaj Finserv Ltd 2 (Listed) (Listed) Auto business arm Financial services arm 80.13% 100% 74% 74% 52.45% 3 Bajaj Finance Ltd Bajaj Allianz Life Bajaj Allianz Bajaj Finserv Direct Bajaj Finserv Hea
Slide 18: What do we stand for
What do we stand for “Non-bank with strategy & structure of a bank” “Focused on mass affluent & above clients with a strategy to cross sell” “Diversified financial services strategy with an optimal mix of risk and profit” “Business construct to deliver a sustainable ROA and ROE” “Focused on continuo
Slide 19: Key strategic differentiators
Key strategic differentiators Part of the Bajaj group – one of the oldest & most A trusted brand with strong brand equity respected business houses Focus on mass affluent and above clients Total customer franchise of 76.56 MM Strong focus on cross selling assets, payments, Highly data oriented. Deep
Slide 20: Our shareholder profile
Our shareholder profile Top 20 investors & their holdings As on 30 As on 30 As on 30 S.No Name of Shareholder Sep 22 Jun 23 Sep 23 1 BAJAJ FINSERV LTD 52.49% 52.49% 52.45% 2 GOVERNMENT OF SINGAPORE 3.37% 3.37% 3.35% FII & FPI 3 MAHARASHTRA SCOOTERS LIMITED 3.13% 3.13% 3.13% 20.39% 4 SBI NIFTY 50 ETF
Slide 21: 16-years financial snapshot - Consolidated
16-years financial snapshot - Consolidated ₹ in crore CAGR Financials snapshot @ FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 (16 yrs.) Loans booked (MM) 1.0 0.6 0.9 1.6 2.2 2.8 3.4 4.9 6.8 10.1 15.3 23.5 27.4 16.9 24.7 29.6 25% Customer franchise (MM) 0.8 1.2 1.9
Slide 22: 6-years financial snapshot – BHFL
6-years financial snapshot – BHFL ₹ in crore CAGR Financials snapshot FY18 FY19 FY20 FY21 FY22 FY23 (6 yrs.) AUM 3,570 17,562 32,705 38,871 53,322 69,228 81% Total income 106 1,156 2,646 3,155 3,767 5,665 122% Interest expenses 47 685 1,616 1,966 2,155 3,211 133% Net Interest Income (NII) 59 471 1,0
Slide 23: Product suite
Product suite BAJAJ FINANCE LIMITED Partnerships Consumer SME Commercial Rural Deposits Payments & Services 1. Consumer Durable Loans 1. Unsecured 1. Loan against securities 1. Consumer Durable 1. Retail Term Issuance 1. Life Insurance Working Capital Loans Deposits 1. PPI Distribution 2. Digital Pr
Slide 24: Executive summary – Bajaj Finance
Executive summary – Bajaj Finance Overview • Focused on Urban, Rural, SME, Commercial and Payments businesses • Strategic business unit organization design supported by horizontal common utility functions to drive domain expertise, scalability and operating leverage • Focused on cross sell, customer
Slide 25: Executive summary – Bajaj Finance (SME, Commercial, Treasury)
Executive summary – Bajaj Finance SME Business • Offers unsecured working capital loans to SME and self-employed professionals • Secured offerings include enterprise loans against property • Focused on accelerating used car financing business • Focused on affluent SMEs with established financials &
Slide 26: Executive summary – Bajaj Housing Finance
Executive summary – Bajaj Housing Finance Overview • A 100% subsidiary of Bajaj Finance Limited • Independent organization design having all dedicated functions and units to drive domain expertise, scalability and operating leverage • Offers full range of mortgage products such as home loans, loan a
Slide 27: Executive summary – Bajaj Housing Finance
Executive summary – Bajaj Housing Finance Lease Rental • Offers LRD to high net-worth individuals and developers against commercial property leased to corporate lessees Discounting • Offers construction finance for commercial properties to existing LRD customers (LRD) • LRD transactions are backed b
Slide 28: Executive summary – Bajaj Financial Securities
Executive summary – Bajaj Financial Securities Overview • A 100% subsidiary of Bajaj Finance Limited • Offers Capital Market products - Broking, Depositary services, Margin Trade Financing, Mutual Funds, IPOs and Distribution of PMS • Broking business caters to two different business segments – HNI
Slide 29: Section 03: Financial performance – Q2 FY24
Financial statement summary – 3.1 Consolidated Section 03 Financial statement summary – Financial performance 3.2 Bajaj Finance Limited Financial statement summary – 3.3 Bajaj Housing Finance Limited 28
Slide 30: Financial summary – Consolidated
Financial summary– Consolidated ₹ in Crore Financials snapshot Q2 FY24 Q2 FY23 Y-o-Y H1 FY24 H1 FY23 Y-o-Y Assets under management 2,90,264 2,18,366 33% 2,90,264 2,18,366 33% Assets under finance 2,85,748 2,12,721 34% 2,85,748 2,12,721 34% Interest income 11,734 8,509 38% 22,555 16,430 37% Fees and
Slide 31: Financial summary – Bajaj Finance
Financial summary– Bajaj Finance ₹ in Crore Financials snapshot Q2 FY24 Q2 FY23 Y-o-Y H1 FY24 H1 FY23 Y-o-Y Assets under management 2,14,891 1,59,452 35% 2,14,891 1,59,452 35% Assets under finance 2,13,210 1,57,293 36% 2,13,210 1,57,293 36% Interest income 9,884 7,227 37% 18,991 14,056 35% Fees and
Slide 32: Financial summary – Bajaj Housing Finance
Financial summary – Bajaj Housing Finance ₹ in Crore Financials snapshot Q2 FY24 Q2 FY23 Y-o-Y H1 FY24 H1 FY23 Y-o-Y Assets under management 81,215 62,931 29% 81,215 62,931 29% Assets under finance 70,954 54,939 29% 70,954 54,939 29% Interest income 1,782 1,248 43% 3,449 2,321 49% Fees and commissio
Slide 33: Section 04: Asset liability management
4.1 Conservative leverage standards – Consolidated 4.2 Resilient business model – Consolidated Section 04 Behaviouralized ALM – Bajaj Finance 4.3 Limited Asset liability management Behaviouralized ALM – Bajaj Housing 4.4 Finance Limited 4.5 Disciplined ALM Management – Bajaj Finance Limited 4.6 Cons
Slide 34: Conservative leverage standards
Conservative leverage standards 7.0 7.0 7.0 7.0 7.0 7.0 7.0 7.0 7.0 7.0 7.0 7.0 7.0 6.8 28.3% 6.6 27.2% 25.0% 24.6% 6.3 6.3 25.0% 23.2% 24.7% 24.8% 23.0% 21.3% 23.2% 21.9% 5.4 25.1% 5.2 5.4 * 5.1 20.7% 5.1 4.9 20.3% 4.7 19.5% 19.7% 18.0% 16.1% 16.3% 14.2% 14.6% 5.7% 5.0% 4.4% 3.8% 3.4% 3.7% 3.2% 2.5
Slide 35: Resilient business model – Consolidated
Resilient business model – Consolidated 46.5% 45.0% 43.1% 42.5% 41.4% 41.8% 38.4% 37.8% 36.0% 36.9% 35.3% 35.4% 34.6% 34.6% 33.3% 29.9% 30.7% 35.1% 34.0% 33.5% 34.0% 27.2% 9.87% 9.47% 9.00% 8.24% 8.27% 8.39% 7.84% 7.61% 7.67% 6.81% 7.04% 5.3% 5.4% 5.2% 3.3% 3.5% 3.7% 3.9% 4.1% 4.1% 4.2% 3.1% Mar'15
Slide 36: Behaviouralized ALM as of 30 Sep 2023 – BFL
Behaviouralized ALM as of 30 Sep 2023 – BFL ₹ in Crore Particulars, 1-7 D 8-14 D 15-30 D >1-2 M >2-3 M >3-6 M >6 M-1 Y >1-3 Y >3-5 Y >5 Y Total Cash & Investments 14,127 1 1,583 13 49 308 3,255 1,173 1,660 10,136 32,306 Advances 7,397 2,503 4,790 9,766 8,882 22,301 34,581 76,921 28,393 21,470 2,17,0
Slide 37: Behaviouralized ALM as of 30 Sep 2023 – BHFL
Behaviouralized ALM as of 30 Sep 2023 – BHFL ₹ in Crore Particulars 1-7 D 8-14 D 15-30 D >1-2 M >2-3 M >3-6 M >6 M-1 Y >1-3 Y >3-5 Y >5 Y Total Cash & Investments 722 31 515 50 9 780 522 - 174 - 2,803 Advances 523 703 854 1,576 1,537 4,325 7,659 20,730 12,250 20,798 70,954 Other inflows 0 - 513 846
Slide 38: Disciplined ALM Management - BFL
Disciplined ALM Management - BFL Cumulative gap upto 1 month Cumulative gap upto 12 month 220% 216% 119% 120% 93% 85% 82% 96% 61% 80% 71% 51% 48% 57% 54% 50% 31% 44% 32% 31% 31% 34% Mar'15 Mar'16 Mar'17 Mar'18 Mar'19 Mar'20 Mar'21 Mar'22 Mar'23 Jun'23 Sep'23 37
Slide 39: Consolidated liability mix
Consolidated liability mix 3% 4% 3% 1% 1% 1% 5% 5% 3% 10% 12% 13% 5% 9% 9% 4% 7% 8% 12% 3% 2% 2% 7% 3% 2% 1% 6% 4% 33% 38% 36% 34% 36% 33% 35% 40% 36% 40% 45% 33% 31% 32% 36% 31% 28% 54% 48% 34% 35% 25% 20% 19% 21% 21% 21% 17% 12% 13% 6% 8% 4% Mar'15 Mar'16 Mar'17 Mar'18 Mar'19 Mar'20 Mar'21 Mar'22
Slide 40: Section 05: Customer franchise and distribution reach
5.1 Customer franchise Section 05 5.2 Geographic presence Customer franchise and distribution reach 5.3 Strong distribution reach 5.4 Product per customer 39
Slide 41: Customer franchise
Customer franchise Q2 FY23 Q2 FY24 Q1 FY24 Total Franchise 76.56 MM 72.98 MM 62.91 MM 49.08 MM Credit segment filter 59.68 MM 56.89 MM 47.46 MM Overall Cross sell franchise 57.94 MM 55.19 MM Non delinquent 41.88 MM customers 51.31 MM 48.91 MM Cross sell franchise 36.39 MM 46.67 MM 44.27 MM (57.8%)*
Slide 42: Product Per Customer (PPC)
Product Per Customer (PPC) Product Per Customer (PPC) is a business metric used to determine average number of products or services (active or closed) a customer has availed over the lifetime with BFL and its subsidiaries. Product offerings are classified into 4 product segments: 1. Lending: All len
Slide 43: Geographic presence
Geographic presence 31 Mar 31 Mar 31 Mar 31 Mar 30 Jun 30 Sep Geographic Presence 2020 2021 2022 2023 2023 2023 Urban lending locations 1,035 1,298 1,368 1,392 1,422 1,469 Rural lending locations 1,357 1,690 2,136 2,341 2,406 2,465 Total Bajaj Finance presence 2,392 2,988 3,504 3,733 3,828 3,934 Net
Slide 44: Strong distribution reach
Strong distribution reach Active distribution 31 Mar 2020 31 Mar 2021 31 Mar 2022 31 Mar 2023 30 Jun 2023 30 Sep 2023 Consumer durable stores – Urban 24,200+ 26,400+ 30,600+ 33,950+ 36,850+ 38,850+ Consumer durable stores – Rural 19,600+ 24,000+ 29,800+ 37,000+ 39,850+ 43,350+ Digital product stores
Slide 45: Section 06: Business segment wise AUM
Section 06 6.1 Business segment wise AUM - Consolidated Business Segment wise Business segment wise AUM – AUM 6.2 Consolidated Mortgages and BHFL 44
Slide 46: Business segment wise AUM - Consolidated
Business segment wise AUM - Consolidated ₹ in Crore Consolidated Consolidated Composition Composition Assets Under Management BFL as of BHFL as of Growth as of as of as of as of (Businesses) 30 Sep 2023 30 Sep 2023 YoY 30 Sep 2022 30 Sep 2023 30 Sep 2022 30 Sep 2023 Two & Three wheeler Finance 10,16
Slide 47: Business segment wise AUM - Mortgages
Business segment wise AUM - Mortgages ₹ in Crore AUM as of AUM as of Mix as of Mix as of Assets Under Management (Businesses) Growth YoY 30 Sep 2022 30 Sep 2023 30 Sep 2022 30 Sep 2023 Consolidated mortgages Home loans 39,703 46,878 18% 55.8% 51.5% Loan against property 13,401 16,060 20% 18.9% 17.7%
Slide 48: Section 07: Update on credit quality
7.1 Provisioning Coverage - Consolidated 7.2 Stagewise ECL provisioning – Consolidated Section 07 Provisioning Coverage - BHFL Update on credit quality 7.3 7.4 Stagewise ECL provisioning - BHFL 7.5 Portfolio credit quality - Consolidated 47
Slide 49: Provisioning Coverage - Consolidated
Provisioning Coverage - Consolidated ₹ in Crore GNPA % NNPA % AUM PCR Particulars GNPA NNPA 30 Sep 23 (%) 30 Sep 22 30 Jun 23 30 Sep 23 30 Sep 22 30 Jun 23 30 Sep 23 Two & Three Wheeler Finance 16,548 528 264 50% 8.01% 3.88% 3.09% 4.17% 1.95% 1.57% Urban Sales Finance 22,973 137 29 79% 0.53% 0.35% 0
Slide 50: Stagewise ECL provisioning - Consolidated
Stagewise ECL provisioning - Consolidated ₹ in Crore Gross Assets Receivable ECL Provision PCR % Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3 Two & Three Wheeler Finance 15,811 747 528 138 135 264 0.9% 18.1% 50.1% Urban Sales Finance 22,936 197 137 105 85 108 0.5% 42.9% 78
Slide 51: Provisioning Coverage - BHFL
Provisioning Coverage - BHFL ₹ in Crore AUM PCR GNPA % NNPA % Particulars 30 Sept 23 GNPA NNPA (%) 30 Sep 22 30 Jun 23 30 Sept 23 30 Sep 22 30 Jun 23 30 Sept 23 Home Loans 45,514 97 41 58% 0.21% 0.22% 0.23% 0.09% 0.08% 0.10% Loan against property 7,264 37 15 59% 0.52% 0.51% 0.60% 0.30% 0.17% 0.25% L
Slide 52: Stagewise ECL provisioning - BHFL
Stagewise ECL provisioning - BHFL ₹ in Crore Gross Assets Receivable ECL Provision PCR % Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3 Stage 1 Stage 2 Stage 3 Home Loans 41,443 164 97 155 34 56 0.4% 20.8% 58.3% Loan against property 5,946 84 37 35 15 22 0.6% 18.6% 58.2% Lease rental discounting 11
Slide 53: Portfolio credit quality – Consolidated
Portfolio credit quality – Consolidated Consumer Durable & Lifestyle Two & three wheeler 1st Bucket 2nd Bucket 3rd Bucket 4th Bucket 5th Bucket 1st Bucket 2nd Bucket 3rd Bucket 4th Bucket 5th Bucket 5+ Bucket Stage Stage 1 98.65% 99.72% 97.89% 99.66% 99.63% 99.64% 99.59% 99.58% 99.51% 1 86.00% 82.86
Slide 54: Portfolio credit quality – Consolidated
Portfolio credit quality – Consolidated Business, Professional & Used car loans Rural B2B Stage 1st Bucket 2nd Bucket 3rd Bucket 4th Bucket 5th Bucket Stage 1st Bucket 2nd Bucket 3rd Bucket 4th Bucket 5th Bucket 1 98.27% 98.73% 98.93% 99.02% 99.06% 99.14% 99.25% 1 99.33% 99.82% 99.79% 99.73% 99.26%
Slide 55: Portfolio credit quality – Consolidated
Portfolio credit quality – Consolidated Home loans Commercial lending 1st Bucket 2nd Bucket 3rd Bucket 4th Bucket 5th Bucket 5+ Bucket Stage 1 99.60% 99.07% 99.63% • Commercial lending business portfolio is 99.85% current 99.37% 99.41% 99.54% 99.56% 99.44% 99.47% 2 0.11% 0.62% 0.17% 0.42% 0.41% 0.28
Slide 56: Disclaimer
Disclaimer This presentation has been prepared by and is the sole responsibility of Bajaj Finance Limited (together with its subsidiaries, referred to as the “Company” or “Bajaj Finance”. By accessing this presentation, you are agreeing to be bound by the trailing restrictions. This presentation doe
Slide 57: Thank You
Q2 FY24 Investor Presentation Thank You
Slide 58: Glossary
Glossary Abbreviation Expansion Abbreviation Expansion ALM Asset liability management LRD Lease rental discounting AMO After market order MF Mutual funds AR Augmented reality MFI Microfinance ASSC Authorised sales & support centre MSME Micro, Small & Medium Enterprises AUM Assets under management MT