Bajaj Finance Ltd — Q3 FY24
Bajaj Finance reported a mixed Q3 FY24 with strong AUM growth of 35% to INR 311,000 crore and record new customer acquisitions of 3.85 million.
neutral
medium
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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.
59%Questions answered1Evaded / deflected11Questions audited
Partial answer
High priority
Confidence on urban B2C despite rising delinquencies?
Asked by Viral Shah, IIFL Securities
Management cites data dependency but does not provide specific numbers or trends for urban B2C.
no specific data on urban B2C delinquenciesdefers to data dependency
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Question
what gives you this confidence on the urban B2C, where the rising delinquencies, you mentioned that it is transient.
Rajeev Jain, Managing Director
Go by the data... in rural B2C, our numbers slowly go down, which is not how you see in urban B2C. So we'd rather be data dependent... At this point in time, it looks transient.
Partial answer
Medium priority
Is digital platform adoption slowing down?
Asked by Viral Shah, IIFL Securities
Management blames regulatory changes for slowdown but does not address underlying adoption trends.
attributes slowdown to regulatory restrictionsno direct answer on organic adoption
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Question
are you seeing some, the progress of the adoption on the digital platforms kind of slowing down?
Rajeev Jain, Managing Director
focus on the star marks, that principally, it's a transient, because from the sixteenth of November, we could not do Insta EMI Card... we continue to invest deeply.
Answered
Medium priority
Any plans to apply for credit card license?
Asked by Viral Shah, IIFL Securities
Management gave a clear and direct 'no' answer.
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Question
I noticed that last few months back there were some changes in the articles of association enabling the company to issue credit cards. So is there anything on the anvil in terms of making an application to RBI?
Rajeev Jain, Managing Director
No. No.
Partial answer
High priority
Risk to growth from NPA pressures and regulatory scrutiny?
Asked by Abhishek Murarka, HSBC
Management acknowledges headwinds but does not quantify potential impact on growth.
no specific quantification of riskgeneric calibration statement
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Question
do you see any risk to that or your intentional slowdown... on a broader basis, do you see that sort of overshadowing the distribution-driven tailwind that you have for growth?
Rajeev Jain, Managing Director
Growth is tailwind, margin is little bit of headwind, risk is little bit of headwind... we'll just continue to pivot and re-pivot between growth, margin, and risk.
Partial answer
High priority
What is happening with asset quality and credit cost guidance?
Asked by Abhishek Murarka, HSBC
Management provides data but does not directly address systemic leverage concerns; overlay guidance deferred.
no direct comment on systemic leverageoverlay release not committed
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Question
what exactly is happening... personal leverage has now become a systemic issue... And second is on the 1.8% credit cost. Does that assume that you will not use any of the management overlay?
Rajeev Jain, Managing Director and Sandeep Jain, CFO
We remain at ever low GNPA and NPA... eventually everything will go back to pre-COVID... The number that Rajeev quoted at 179 basis points for the nine-month period is gross of any release from overlay.
Evasive
High priority
Status of RBI embargo submission and feedback?
Asked by Kunal Shah, Citigroup
Management avoids sharing regulator feedback and timeline, only states submission status.
declined to comment on feedbackno timeline for lifting
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Question
with respect to the submission... are we largely done with the submission out there? What has been the early feedback from the regulator? When do we see the embargo getting lifted?
Rajeev Jain, Managing Director and Sandeep Jain, CFO
I would not like to make too much comments on it... we had given an initial submission... The final submission... is yet to be done... we should be able to do it very soon.
Answered
Medium priority
Initial experience with new product rollouts?
Asked by Kunal Shah, Citigroup
Management provides specific numbers and qualitative assessment for each new product.
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Question
what has been the experience and in terms of the acceptability? Because there were, there are already existing competitors out there in many of these new segments.
Rajeev Jain, Managing Director
new auto loans... we are now doing INR 240-INR 250 crore odd... On two-wheeler... we are now doing 27 to between 27 and 30,000 accounts a month... MFI... is a slow burn train.
Partial answer
Medium priority
Why only one-year extension for RBL credit card partnership?
Asked by Kuntal Shah, Oaklane Capital
Management acknowledges deficiencies but does not detail them or provide resolution timeline.
no specifics on deficienciesno timeline for resolution
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Question
there was a news flow of RBI-RBL and Bajaj not getting the credit card extension beyond one year... what is the issue out there on the regulatory front?
Rajeev Jain, Managing Director
RBI has granted one-year renewal... RBI has communicated with the company that has noted certain deficiencies... we are engaging with RBI and our partner, RBL, and are committed to resolve all the deficiencies.
Answered
Low priority
Why is digital signature and vernacular language difficult to solve?
Asked by Kuntal Shah, Oaklane Capital
Management explains complexity due to scale and provides a timeline for implementation.
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Question
shouldn't the signing of digital and the vernacular be an easy proposition to solve, given the technology tools that's available?
Rajeev Jain, Managing Director
At scale, at 105--25,000 or 150,000 loans a day... is where the complexity emerges... we have taken a decision that we will do it by March 2024 for all our products.
Partial answer
High priority
Is rural B2C stress spreading to higher ticket loans?
Asked by Antariksha Banerjee, ICICI Prudential
Management provides data but does not directly confirm or deny spread to higher ticket loans.
no clear yes/no on spread to higher ticketsfocuses on sweet spot
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Question
is it restricted to the lower ticket segment as you highlighted last time? Or do you think given the stress levels being elongated, it's now spreading to higher ticket loans also?
Rajeev Jain, Managing Director
even in rural, the numbers have come from lower ticket and the value has come from high tickets... the flow rates of a... lower ticket is higher than the higher ticket. But adjusted for net outcomes... it is our sweet spot... remains between INR 200,000 and INR 400,000.
Answered
Medium priority
Why has credit card sourcing stagnated?
Asked by Piran Engineer, CLSA India
Management clearly attributes stagnation to partner banks tightening criteria due to industry stress.
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Question
on credit cards... the sourcing has sort of stagnated at 1.5-2 lakhs a quarter. What really has led to this?
Rajeev Jain, Managing Director
we understand from our partners that they've also experienced deterioration... and have contained the growth, based on their AIP engines.
Partial answer
Medium priority
What has changed in rural lending thesis?
Asked by Piran Engineer, CLSA India
Management gives a logical explanation but lacks quantitative detail on the change.
no specific data on competition impactgeneral explanation
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Question
what has changed in the last two, three years, that we are actually more concerned about rural than urban?
Rajeev Jain, Managing Director
access has improved... clearly we could pick and choose more earlier than now, given massive supply... significant competitive activity and increase supply side, has sharpened the funnel.