Bajaj Finance posted a 29 per cent growth in its second quarter net profit helped by a strong showing in its consumer durables and small and medium enterprise businesses.
In the July-September period, the non-banking finance company’s net profit rose to Rs 167 crore from Rs 129 crore, a year ago.
Total income was up 31 per cent at Rs 962 crore.
Finance costs rose 29 per cent during the quarter. This was a period marked by high interest rates overall in the financial system after the RBI raised the cost of bank borrowing in mid-July.
The company’s consumer durables loan portfolio grew 26 per cent to Rs 2,652 crore. The Pune-based company also extended 36 per cent more loans to small and medium enterprises.
However, the commercial loans portfolio fell 23 per cent to Rs 625 crore.
“The commercial segment contributes just nine per cent to the balance sheet now. We expect it to go down further to six per cent by the end of the fiscal,” said Rajeev Jain, Chief Executive of the company, said. “The construction equipment and infrastructure segments will continue to face difficulties in the foreseeable future.”
Jain said the underlying demand is weak, including in the automotive segment. “The number of units sold across categories is not showing a big pick-up,” he said.
Asked if the company will stand to gain at the expense of banks, after the RBI cracked down on zero per cent financing schemes of the latter, Jain said the company does not provide loans to the segments that the RBI has cracked down on.
According to Jain, the crackdown will affect financing schemes for purchase of smart phones and tablets. “We are not in this segment, so we do not think it will make much difference to us.”
Shares of Bajaj Finance ended 1.79 per cent lower, at Rs 1269.90, on the BSE.
satyanarayan.iyer@thehindu.co.in