Covid 19 pandemic: Bajaj Finance loses 350,000 customers in 10 days
By MYBRANDBOOK
The unprecedented lockdown due to pandemic has hurt the country’s largest consumer finance company in more than one way. In a more truncated April-June 2020 quarter (anticipated being a 60-day quarter because of the lockdown versus the usual 90 days), these performance parameters could come under severe pressure. The most evident impact will be on its business, which may return to normalcy in September if the lockdown is lifted on April 14.
In the worst cases, the business may rebound only by the March 2021 quarter.
Bajaj Finance published some key performance metrics for Q4. The new customer addition and the new loans disbursed were the weakest since FY15 — even worse than the demonetisation-hit quarters of FY17. Count of new customers acquired was down as compared to the December 2019 quarter's 2.46 million figure.
While the reasonable estimation of business impact because of the Covid-19 pandemic was well-received by analysts, they feel Bajaj Finance's stock may come under pressure when trade restarts on Tuesday (the markets were closed on Monday on the occasion of Mahavir Jayanti).
In a call with analysts, Bajaj Finance’s management team, led by its Managing Director Rajeev Jain, said that over the past 10 days, the company had lost nearly 350,000 customers, impacting its assets under management (AUM) by Rs 4,750 crore (3.22 per cent of total AUM as of March 31).
“We are in an uncharted zone. We will be partially flying blind between April 15 and June 30,” Jain warned.
Apart from loan growth, the other worrisome aspect is a possible asset quality deterioration. Besides, the company is assessing the adequacy of provisioning for identified large accounts and will consider enhancing provisions for these accounts. It is also considering one-time accelerated provisioning for Covid-19 to further strengthen its provisioning standards.
Covid-19-related asset quality pressures may also lead to one-time accelerated provisioning. Both factors together, investors should brace for an increase of 40-50 per cent in the credit cost computed on FY20’s numbers, though in the worst case credit cost could increase by 80-90 per cent.
“We will continue to carry excess liquidity on our books which will result in the extra cost of carry for the liquidity,” Jain added, hinting at a near-term compression in profitability or net interest margin.
Bajaj Finance said it remains well-capitalised with the capital adequacy ratio of approximately 25 per cent as on March 31.
BREAKING NEWS
TECHNO TRENDS
BHIM to join e-commerce, competing with PhonePe and Google Pay
The government-supported payment software BHIM is getting ready to join t...
The latest version of X helps prevent deepfakes on social medi
To combat deepfakes and shallowfakes, Elon Musk revealed a new update t...
India and Namibia collaborate on a payment system similar to U
Once operational, the platform will enable digital transactions in Namibia,...
Sebi issues show-cause notices to six Adani group firms
Sebi issued show-cause notices to six Adani Group firms, including Adani ...
E-Magazine
TECHNOTAINMENT
Airtel Xstream Play strengthens regional content library, part
Bharti Airtel (“Airtel”), one of India’s leading telecommunications
ED attaches Raj Kundra, Shilpa Shetty’s Rs 97 crore worth as
The Enforcement Directorate (ED) has seized businessman Raj Kundra's pro
MOVERS & SHAKERS
Clover Infotech appointed Subham Banerjee as CDO
Clover Infotech has announced the appointment of Subham Banerjee as its Ch
Saviynt ropes in Sanjeevi Kumar as new Sales Director in India
The cloud-native identity and governance platform solutions provider Saviy
OPEN YOUR EYES
INTERVIEWS
Forcepoint positions itself as a trusted protector of sensitiv
To help SMEs and SMBs use the SASE/SSE framework and scale both in terms of
Making security more accessible, CP PLUS stands unrivaled as a
The topmost priority of CP Plus is to establish a dedicated R&D Hub in Indi
HOT PICK
COLORFUL rolls out an array of gaming laptops
COLORFUL launched its incredible series of COLORFUL EVOL P15 gaming laptop
Dell Technologies launches new AI-powered commercial PC portfo
Dell Technologies has launched the broadest portfolio of commercial AI lap
MAKE IN INDIA BRANDS
TP-LINK INDIA PVT LTD.
TAC SECURITY SOLUTIONS
VERSA NETWORKS INDIA PVT. LTD.
LUMINOUS POWER TECHNOLOGIES PVT. LTD.
EMINENT CIO'S OF INDIA
ICONS OF INDIA
Technology Icons Of India 2023: Lt Gen (Dr.) Rajesh Pant (Retd.)
LT Gen(Dr.) Rajesh Panth (Retd.), National cyber security coordination...
Technology Icons Of India 2023: Gautam Adani
Gautam Adani is the Founder and the Chairman of the Adani Group, an In...
Technology Icons Of India 2023: Hari Om Rai
Hari Om Rai is the Co-founder, Chairman & Managing Director of Lava In...
PARTNER SPEAKERS
PSU
GeM maintains transparency in online procurement of goods & services
Created in a record time of five months, Government eMarketplace is a ...
NIC bridging the digital divide and supporting government in eGovernance
The National Informatics Centre (NIC) is an Indian government departme...
New defence PSUs will help India become self-reliant
MIL, India’s biggest manufacturer and market leader is engaged in Pr...
VIDEOS
Top 25 Brands
Value-Added Distribution
ACCERON INFOSOL PVT. LTD.
It is a leading value added distributor in the IT security space and h...
NETPOLEON SOLUTIONS
Netpoleon Group is a Value-Added Distributor (VAD) of Network Security...
INFLOW TECHNOLOGIES PVT. LTD.
Inflow Technologies is a niche player in the IT Infrastructure Distrib...
ITFORUM 2024
WIITF 2024
CMO of the Year
WOMEN LEADERSHIP
EMINENT CIO's OF INDIA
TRENDS IN TECHNOLOGY
MORE VIDEOS
ADVERTISEMENTS
TECHNOLOGY DISRUPTION
UNICORNS REVOLUTIONISING
