Bajaj Finance Ltd — Q1 FY24
Bajaj Finance delivered an excellent Q1 FY24 with PAT of INR 3,437 crore (up 32% YoY) and AUM growth of 32% to INR 2.7 lakh crore, the highest ever quarterly addition of INR 22,...
bullish
high
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Claim Ledger
Did management answer the analysts?
Every material analyst question, graded on whether management actually answered it — with the verbatim exchange and quantitative claims checked against filed numbers.
83%Questions answered0Evaded / deflected9Questions audited
Answered
High priority
What are the trouble spots or areas of concern despite perfect quarter?
Asked by Bharat Shah, ASK Investment Managers
Management directly identified leverage and personal loan growth as concerns.
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Question
In this very perfect-looking, more direct, kind of a 10 out of 10, kind of a picture, what are the trouble spots or the areas of concern?
Sandeep Jain, CFO
I had outlined even in my fourth quarter call, that we are a little troubled about the level of leverage in the system. The amount of personal loan growth is troubling us.
Answered
High priority
Will ROE remain at similar or better levels?
Asked by Bharat Shah, ASK Investment Managers
Management provided explicit long-term ROE guidance range.
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Question
Would we say that, ROE that we touched the highest in the history in this quarter, with all the moving parts, net-net ROE, would remain at similar or better levels?
Rajeev Jain, Managing Director
We think a 21%-23% ROE, given 19, 20, 23, 24, and mind you, last year, we had no one-timers... We are penciling in that the long-term guidance, we are upping from 19%, 21% to 21%, 23%.
Answered
Medium priority
Can customers move into cross-sell franchise bucket over time?
Asked by Piran Engineer, CLSA India
Management clearly explained the fixed filter based on 30+ delinquency.
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Question
Out there, let's say I look at the 1 QFY23 numbers, those customers who are part of the 16 million, but not part of the 35 million cross-sell franchise, can those customers be part of the 44 million cross-sell franchise today?
Rajeev Jain, Managing Director
Any customer who ever went into 30 plus, can never move bucket, the filter. ... We don't deal with clients who ever go into 30 plus.
Partial answer
Medium priority
How much of personal loan growth is tenure vs disbursement? Are lenders expanding pie?
Asked by Piran Engineer, CLSA India
Management confirmed pie expansion but did not break down tenure vs disbursement.
did not quantify tenure vs disbursement split
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Question
Just wanted to understand for the industry, the strong growth we've seen more than 25% over the last 3, 4 years, how much of that would be driven by tenures versus core disbursement growth? ... is everyone essentially fighting for the top 4, 5 crore customers of the country, or are the lenders expanding the pie?
Rajeev Jain, Managing Director
Clearly, pie has expanded. ... It's an industry-wide phenomena, straddles across public, private, non-bank, everybody.
Declined
Low priority
What % of consol borrowings are repo linked?
Asked by Piran Engineer, CLSA India
CFO did not have the number and deferred.
deferred to later
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Question
what % of our console borrowings would be repo link? I mean, console, bank borrowing.
Sandeep Jain, CFO
I don't have it handy, Kiran. I'll probably connect with you separately.
Answered
High priority
What is expected NIM compression for remaining quarters?
Asked by Gaurav Singhal, Aspex Management
Management gave specific range for Q2 and Q3 compression.
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Question
Going forward, is it more like 30 basis points or thereabout, remaining for the next three quarters, and we still stay at 10% plus kind of NIM for the year?
Sandeep Jain, CFO
We expect about 10 to 15 basis point compression for at least 2 quarters. ... quarter 2 and quarter 3.
Answered
Medium priority
Will operating leverage continue for rest of year?
Asked by Gaurav Singhal, Aspex Management
Management confirmed operating leverage will continue.
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Question
It is something that, would it be fair to assume that this continues going for the rest of the year as well, going forward as well?
Rajeev Jain, Managing Director
I guess, Gaurav, you'll see it coming, I think throughout the year. It'll be slow but steady, is what I can tell you.
Partial answer
Medium priority
What are DAU/MAU metrics for digital journey? What is social and rewards?
Asked by Kuntal Shah, Oaklane Capital
Management explained concepts but did not provide quantitative digital metrics.
no DAU/MAU numbers given
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Question
can you share with us some metrics which can give us some indicator of how we are tracking the digital journey of the users, or DAU, MAU, North Star metrics, abandoned screen visits, whatever you can? What exactly do you mean by social and rewards?
Rajeev Jain, Managing Director
Rewards, principally, when we look at, the only way you could become a customer and buy rewards is to go to Times Reward. ... Social is all about if you use Instagram, you won't find any content there. It's all about videos and photos.
Evasive
Low priority
Any way to monetize or recover money from IL&FS/Gift City?
Asked by Kuntal Shah, Oaklane Capital
Management deferred without providing any recovery outlook.
no update given
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Question
I went to Gift City recently, and there's no space, and we have towers of IL&FS and all. Any way to monetize or any way to recover money?
Rajeev Jain, Managing Director
Gift City, I don't have an update, Kuntal, at this point in time.
Answered
Medium priority
How do you perceive gold loan business going forward?
Asked by Shweta Daptardar, Elara Capital
Management provided specific balance sheet target and branch count.
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Question
we have actually doubled or over more than doubled the gold loan branches quarter on quarter. ... How do you perceive this business going forward?
Rajeev Jain, Managing Director
Foresee ending balance sheet could be anywhere between INR 5,000-INR 5,500 crore. We have doubled down on the business... We now have 564 branches.
Declined
Low priority
Can you disclose captive vs non-captive portfolio on two/three-wheeler?
Asked by Shweta Daptardar, Elara Capital
Management declined to disclose, citing early stage.
too early to disclose
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Question
are we okay disclosing captive versus non-captive portfolio on two-wheeler, three-wheeler side, or is it little too early?
Rajeev Jain, Managing Director
Very early. ... when we reach INR 5,000 crore, just connecting this point to the gold loan, we would start to disclose gold loan also separately.
Partial answer
Medium priority
How many customers rejected this quarter due to over-leverage?
Asked by Prashant Sarangi, SBI Mutual Fund
Management described funnel percentages but did not provide absolute rejection count.
no absolute rejection number given
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Question
how many customers would you have ended up rejecting this quarter, both existing and new, simply because of this over-leverage issue?
Rajeev Jain, Managing Director
In general, if I would take a funnel view, those customers to whom I give B2B don't default at all. Of that, I land up offering a personal loan only to 60%. Eventually, I land up giving only to 40.