You are here: Home » Opinion ยป Financial X-Ray
Business Standard

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

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.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

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