Bajaj Finance shares rose 10.45% to Rs 7,062.15 on the BSE in intraday trade on Thursday, gaining 12.7% in two days after the company announced a 159% year-on-year (YoY) increase in its consolidated net profit to Rs 2,596 crore for the quarter ended June 2022.

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So far in July, the market price of Bajaj Finance has increased by 29.6%, compared to a 6.8% increase in the S&P BSE Sensex.

The profit increase was boosted by higher net interest income (NII) and fewer loan losses and provisions. The consumer lender reported a net profit of Rs 1,002 crore in the same period last year (Q1FY22).

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The lender’s NII increased by 48% to Rs 6,638 crore in Q1FY23, compared to Rs 4,489 crore in the same period the previous year, while loans booked in the quarter increased by 60% year on year to 7.42 million.

On a standalone basis, the lender’s net profit increased 179% year on year to Rs 2,356 crore, up from Rs 843 crore the year-ago period. NII increased by 48% year on year to Rs 6,140 crore.

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The lender’s asset quality improved, with gross non-performing assets (NPAs) standing at 1.25%, down 35 basis points (bps) sequentially. Net NPAs fell 17 basis points sequentially to 0.51%.

Asset under management (AUM) growth accelerated, with Core AUM increasing 31% year on year to Rs 2.04 trillion, mainly led by Consumer B2B and Rural Consumer B2B. As of Q1FY23, the customer franchise was at 60.30 million.

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“Bajaj Finance is comfortable to add 9-10 million new customers in FY23. Led by strong Asset Liability Management (ALM), management expects the impact of recent interest rate hikes on the cost of funds will be gradual. The company is well on track to get transformed into an adaptable new-age fin-tech. Improvement in asset quality with high profits enabling provisions & w/off under check is positive,” ICICI Securities said.