Bajaj Finserv posts record FY2016 profit

Insurance companies also post profit growth

Salil Panchal
Published: May 24, 2016 07:39:27 PM IST
Updated: May 24, 2016 09:06:46 PM IST

Life is not a template and neither is mine. Like several who have worked as journalists, I am a generalist in my over two decade experience across print, global news wires and dotcom firms. But there has been one underlying theme in each phase; life gave me the chance to observe and tell a story -- from early days tracking a securities scam to terror attacks and some of India's most significant court trials. Besides writing, I have jumped fences to become an entrepreneur, as an investment advisor -- and also taught the finer aspects of business journalism to young minds. At Forbes India, I also keep an eye on some of its proprietary specials like the Rich list, GenNext and Celebrity lists. An alumnus of Xavier Institute of Communications and H.R College of Commerce and Economics in Mumbai, I have worked for organisations such as Agence France-Presse, Business Standard, The Financial Express and The Times of India prior to this.

Bajaj Finserv posts record FY2016 profit
Image: Joshua Navalkar
Sanjiv Bajaj, managing director of Bajaj Finserv

Bajaj Finserv Ltd, the holding company of various financial services business of the Bajaj Group, reported a 14 percent jump in consolidated gross revenues at Rs 22,364 crore for the full year ended March 2016, against Rs 19,589 crore for the corresponding period, a year earlier.

Consolidated net profit also rose 10 percent to a record Rs 1,863 crore for FY2016 from Rs 1,690 crore in FY2015, a statement to the Bombay Stock Exchange said.

Bajaj Finserv has a 57.28 percent stake in the non-banking finance company (NBFC) Bajaj Finance; it also holds a 74 percent stake each in the two insurance companies, Bajaj Allianz General Insurance (Bagic) and Bajaj Allianz Life Insurance Company (Balic), with Allianz of Germany holding the balance 26 percent each.

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Bajaj Finance, one of the largest consumer finance companies in India, also reported its earnings earlier in the day, with a 42 percent jump in net profit at Rs 1,279 crore for the twelve months to March 2016, from Rs 898 crore in the previous year. Assets under management grew 36 percent to Rs 44, 229 crore. An SBICAP Securities report said that Bajaj Finance profit was driven by a robust loan growth, partially offset by higher provisioning, while asset quality remained stable. Net non-performing assets as a percentage to total loans, was at 0.28 percent.

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This comes at a time when credit demand continues to be sluggish across the country.

The two group insurance firms however reposted relatively flattish growth for the full year, in a tough and competitive business environment. Balic reported a consolidated net profit of Rs 879 crore against Rs 876 crore a year earlier while Bagic posted a profit of Rs 564 crore against Rs 562 crore a year earlier.

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During the year, Bajaj Finserv became a core investment company (CIC) under the regulations laid out by the Reserve Bank of India. Core Investment Companies, (CIC) are those which have their assets predominantly as investments in shares for holding stake in group companies but not for trading, and also do not carry on any other financial activity.

The Bajaj Finserv stock price slid and closed down 2.35 percent or 42.45 rupees to Rs 1,762.15 rupees at the BSE prior to the announcement of the earnings.

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