Bajaj Finserv on Wednesday reported a four-fold jump in its consolidated net profit to Rs 979 crore for the quarter ended March, even as consolidated income rose 16% YoY to Rs 15,387 crore. The company said the consolidated profit for the latest quarter was not comparable.
The company’s insurance subsidiaries chose to hold a large part of the equity securities portfolio as fair value through profit and loss account. The pandemic resulted in a significantly larger-than-normal fall in the value of shares traded on the stock exchanges in Q4FY20.
As on 31 March 2021, the Sensex rebounded by over 68% from March 31, 2020 levels, resulting in higher-than-normal mark-to-market gain on investments of insurance subsidiaries during FY21. The mark-to-market adjustment for Q4FY21 was not significant, the company said.
Bajaj Finserv is the holding company for the Bajaj’s group’s financial services and insurance business. The profit after tax of the company’s general insurance arm, Bajaj Allianz General Insurance, fell 10% to Rs 273 crore. The profit after tax of the life insurance business, Bajaj Allianz Life Insurance, zoomed 515% to 234 crore on higher investment income. Bajaj Finance had reported a 42% jump in net profit to Rs 1,347 crore.
The board has recommended a dividend of Rs 3 per share or 60% on the face value of Rs 5 per unit. The Bajaj Finserv stock reached the 52-week-high level of Rs 10,615.95 on Wednesday with spurt in volumes by more than 1.40 times and closed at Rs 10,494.94 with a gain of 4.06% on the BSE.
The general insurance business saw a de-growth on account of a slowdown in demand for retail health insurance after a recent price hike, while the company continued to be cautious in the employer-employee group health due to high loss ratios. The motor insurance saw a growth in the two-wheeler and four-wheeler segments, but commercial vehicles were still below pre-COVID levels.
On the claims front, the company said motor and retail health non-COVID claims had come back to pre-COVID levels but motor third party claims were not being settled at the same pace as courts were not operating at full capacity which could lead to additional interest cost on such claims. The general insurance gross written premium grew by 5% to Rs 2,787 crore while net written premium was up 6% to 1,963 crore in Q4FY2. Combined ratio was at 96.6% in Q4 FY21 93.8% in Q4FY20.
The life insurance business saw a 515% rise in PAT to Rs 378 crore during the March quarter. This was on account of higher investment income of Rs 216 crore. The individual rated new business was up 63% to Rs 988 crore while group new business went up 66% to Rs 1,471 crore. Gross written premium during the March quarter went up 44% to Rs 3,128 crore. Net new business value jumped 59% to 378 crore.