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Bajaj Finance: Focus shifts from growth to capital preservation

Profit plunges as the lender loses business worth Rs 4,500 cr in 8 days of lockdown

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Bajaj Consumer | Bajaj Discover

For a business largely dependent by volumes, the March quarter (Q4) results of are a good indicator as to how financials can get derailed if lending halts for seven-eight days in a quarter.

For the first time in six years, reported a contraction in net profit, down 19 per cent year-on-year because of higher provisioning costs. Pre-tax profit fell 29 per cent year-on-year. New customer acquisitions plunged 22 per cent sequentially in Q4.

Before the results, Morgan Stanley had already assumed that new customer growth may be negligible in FY21. With key business segments, such as wholesale consumer durable and automobile, not operating in April, and others, such as retail consumer durable and SMEs, yet to open up, the June quarter for the lender will be a washout. What’s worse, its impact may last for most of FY21.

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First Published: Wed, May 20 2020. 12:28 IST
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