52-WEEK BLOCKBUSTER: BAJAJ FINANCE:: Business Line

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Strong demand driven by consumption over the last couple of years has helped Bajaj Finance, a financier of a host of retail products and SME loans. It has come a long way from being a captive financier to Bajaj Auto vehicles. Its presence in semi-urban and rural areas helped it take advantage of the untapped business opportunities held in these regions. Bajaj Finance leveraged on these financing opportunities even as banks shied away from most of the non-mortgage retail segment.

Thanks to this, the stock of Bajaj Finance has continued merrily along its upward journey, clocking a 96 per cent gain over the past one year on top of the over 308 per cent the year prior. In addition to healthy growth in business, strong margins and improving asset quality of the book have aided the stock.

Bajaj Finance, over the last few years, increased focus on high-yielding businesses such as consumer durables, loan against shares and property and personal loans. As a result, net profits witnessed a triple-digit growth over the last few quarters. The return on assets improved from 1.3 per cent in FY-09 to 4.8 per cent (annualised) during the third quarter of FY-11. The net non-performing asset ratio came down from 5.5 per cent in March 2009 to 1.1 per cent in December 2010