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Informist, Tuesday, Apr. 29, 2025

MUMBAI – Bajaj Finance Ltd. remains confident of achieving its targets for margins, credit cost, and profitability in the current financial year despite missing them in 2024-25 (Apr-Mar), the management said in a post-earnings call with analysts Tuesday. "I would call overall FY25 a mixed year for us as a firm," Vice-Chairman Rajeev Jain said. "Good year on volume, assets under management growth, customer acquisition, operating efficiency, and pre-producing profit. Elevated credit costs resulted in subdued profit growth, and that's why it's a mixed year. We hope to change that as we get into FY26." 

The management said that since the company has reduced pricing on select unsecured business, it expects the cost of funds to go down by 10-15 basis points in FY26, which will help to stabilise margins. "Unless and until something dramatically changes in the macro environment over which we have limited control," said Jain. "Otherwise, I foresee that in the fourth quarter (of FY26), the numbers should look lower than our pre-COVID numbers."

Strong growth in new loans booked and assets under management helped to lift Bajaj Finance's net profit by 17% on year in the March quarter. The bottom line was also supported by steady growth in interest income. The net profit was slightly higher than the consensus estimate of analysts.

Bajaj Finance's consolidated net profit for the quarter attributable to the owners of the company was INR 44.80 billion, against analysts' expectations of INR 44.49 billion. The board of the non-banking finance company announced a four-for-one bonus share issue and two-for-one stock split. The company also declared a final dividend of INR 44 per share, to be paid out of the exceptional gain from dilution of its holding in Bajaj Housing Finance Ltd. after the subsidiary was listed in the September quarter.

Asked what Bajaj Finance plans to do with the excess capital, the management replied that the only thing it knows is building businesses. While it looks for organic growth, it continues to explore options, the management added. For FY26, the company estimates the return on equity to be in the range of 19-20%. For the March quarter, the company's return on equity stood at 19.1%.

The management also said it is "mostly done" with the task of widening Bajaj Finance's geographical footprint. In the reporting quarter, the company opened offices at four new locations. Separately, the company opened 137 standalone gold loan branches and 30 specialised microfinance branches. Overall, it now has 964 gold loan branches and 333 microfinance branches.

Shares of Bajaj Finance closed flat at INR 9,093.00 Tuesday on the National Stock Exchange.  End

Reported by Kshipra Petkar and Vaishali Tyagi

Edited by Rajeev Pai

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