Bajaj Finance Ltd Q4 FY22 Earnings Conference Call Insights

Key highlights from Bajaj Finance Ltd (BAJFINANCE) Q4 FY22 Earnings Concall

Q&A Highlights:

• Abhishek Murarka from HSBC asked about the NIM and cost to income outlook for FY23. Rajeev Jain MD said opex to NIM would remain elevated. Eventually it will lead to better OpEx to NIM ratio eventually.

• Abhishek Murarka from HSBC asked about SME pricing pressure. Rajeev Jain MD replied that the company has been creating significant granularity in the SME business over the last 14 years. BAJFINANCE added that if one hurries up too quickly in this business, one gets hurt and if one does it too slowly, the cost gives in.

• Apurva Deshmukh from Crisil Limited enquired about the percentage of consumer durable in the stand-alone AUM of Bajaj Finance. Rajeev Jain MD answered that it’s close to INR 20,000 crores in terms of balance sheet of the consumer durable financing. On an aggregate basis, it is 10% of the balance sheet.

• Apurva Deshmukh from Crisil Limited enquired about the percentage of personal loans individually in the stand-alone AUM of Bajaj Finance. Rajeev Jain MD said it would be INR50,000-odd crores, plus minus.

• Nischint Chawathe of Kotak Securities asked about the guidance on the total quantum of reward pay out next year in terms of its impact on P&L. Rajeev Jain MD said that for the ’19, ’20 year it was in the range of INR 180 crores to INR 200 crores. BAJFINANCE added that there is no need for a specific guidance number, but sales promotion continues to be a discretionary play.

• Sameer Bhise from JM Financial asked about the payments business from a scale-up perspective. Rajeev Jain MD replied that the focus of the payments business if the company ever wanted to make it viable, is to essentially focus on the franchise.

• Abhijit Tibrewal of Motilal Oswal asked about the current estimate of the subvention pool market share of 70%.  Rajeev Jain MD answered that it has remained between 68-70% for the consumer electronics business and has remained between 57% to 59% in the digital business. These are two large categories. In the digital space it has moved up, while in the CD space it’s remained steady.

• Abhijit Tibrewal of Motilal Oswal asked about the payments business and if it will be accretive to bottom line. Rajeev Jain MD replied that it will never be accretive.