Shares of NBFC major Bajaj Finance fell nearly 5% on Wednesday after the company reported a 36% drop in its consolidated net profit for the quarter ended September 2020, on back of higher loan losses and elevated provisions.
Bajaj Finance's profit declined to Rs 965 crore during Q2 FY21, down from Rs 1,506 crore in the corresponding period last fiscal. However, consolidated net interest income of the NBFC major increased 4% YoY to Rs 4,165 crore.
Shares of Bajaj Finance opened at Rs 3,279 and fell as much as 4.92% to touch an intraday low of Rs 3,101, as against the previous close of Rs 3,262 on BSE. The share price of Bajaj Finance has fallen 4.8% in the last 2 days.
Bajaj Finance stock has fallen 6.25% in the one week, 5% in one month and 25% since the beginning of the year.
The company's loan losses and provisions during the Q2 FY21 stood at Rs 1,700 crore as against Rs 594 crore in Q2 FY20. Consolidated assets under management of the NBFC increased to Rs 137,090 crore as compared to Rs 135,533 crore in the year-ago period.
Bajaj Finance's gross non-performing assets (NPA) eased to 1.03% from 1.4% in the previous quarter while net NPA declined to 0.37% from 0.50%, QoQ.
"Consequent to the ongoing pandemic, the Company has further increased its provisions on stage 1 and 2 assets by Rs 1,370 crore to Rs 5,099 crore as of September 30, 2020, as against Rs 3,729 crore as of June 30, 2020. The Company has strong pre-provisioning profitability to manage loan losses arising out of COVID-19," Bajaj Finance said in a regulatory filing.