In FY15 Bajaj finance and General Insurance business have performed as per expectations. Life Insurance business is muted since 2008 because of Indian household preference for physical assets like gold and real estate over financial assets in recent year along with a cap on ULIP charges in 2010 and new product regulations around Individual products that came into force since FY 14.
Bajaj Finserve Ltd (BFL) a holding company of Bajaj Finance Ltd (61.99%), Bajaj Life (74%) and General Insurance (74%) and Bajaj Financial Solution Ltd (100%) has posted a profit of Rs.7.07 billion in Q4FY15 that is flat against Q4FY15. Total income was Rs.19.17 billion from Rs.14.51 billion, 32.12% higher on a year on year basis. But EBIT margins have decreased 1925 bps on a yearly basis and net profit margin has been under pressure with a decrease of 1184 bps.
Bajaj Finance Ltd, 26 years old, a diversified NBFC in consumer finance, SME and commercial lending arm posted PAT (profit after Tax) of Rs.2.31 billion in Q4FY15, an increase of 27% from Rs.1.82 billion seen in Q4FY14. For Q4FY15 Net NPA is standing at 0.45% and Q4FY14 NPA stood at 0.28%.Net interest income has increased by 28.24% to Rs.8.322 billion in Q4FY15 from RS 6.497 billion in Q4FY14. Bajaj Housing Finance Limited, the wholly owned subsidiary of the Company, has announced of Rs 14 billion fund raising via QIP.
General Insurance and Life Insurance business have reported PAT of Rs.1.44 billion and Rs.5.591 billion respectively in Q4FY15.General Insurance posted a 43% increase whereas Life Insurance posted a decline of 19% in PAT on a yearly basis. Table 2 shows segment wise performance.
We continue to hold this company in our portfolio. In the last 4 years book value has increased at a CAGR of 34% from Rs.181 to Rs.689 in 2014-15. Currently price to book value ratio is 2.11.We expect business growth from Bajaj Allianz Life Insurance (BALIC) to stabilise in future as the regulatory overhang settles down.
Bajaj Finserve has presence in our retirement 12 stock and 19 stock portfolio.