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Informist, Tuesday, Apr. 29, 2025

 

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--Jan-Mar consol net profit INR 44.80 bln 
--Analysts saw Bajaj Finance Jan-Mar consol net profit INR 44.49 bln 
--Jan-Mar consol PAT INR 44.80 bln vs INR 38.25 bln year ago 
--FY25 consol PAT INR 166.38 bln vs INR 144.51 bln year ago 
--Jan-Mar consol revenue INR 184.57 bln vs INR 149.27 bln year ago 
--FY25 consol revenue INR 696.84 bln vs INR 549.74 bln 
--To pay INR 12 per share special interim dividend for FY25 
--To pay INR 44 per share final dividend for FY25 
--Board approves 4-for-1 bonus share issue 
--Board OKs 2-for-1 stock split 
--Gross NPA ratio 0.96% on Mar 31 vs 0.85% year ago 
--Net NPA ratio 0.44% on Mar 31 vs 0.37% year ago 
--Consol AUM at INR 4.17 tln as on Mar 31, up 26% YoY 
--Consol net interest income INR 98.07 bln, up 22% YoY 
--Consol loan loss and provisions INR 23.29 bln 
--Consolidated deposits at INR 714.03 bln Mar 31, up 19% YoY

 

By Kabir Sharma and Aaryan Khanna

 

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

 

Bajaj Finance's consolidated net profit attributable to the owners of the company was at INR 44.80 billion in the quarter ended March, against analysts' expectations of INR 44.49 billion. The board of the non-bank financier announced a four-for-one bonus share issue and a two-for-one stock split. The company also declared a final dividend of INR 44 per share, as well as a special share dividend of INR 12 per share.

 

Shares of the company which have risen over 18% since it declared its earnings for the December quarter in late January, ended flat at INR 9,093.00 on the National Stock Exchange on Tuesday. The company reported its earnings after market hours.

 

The number of new loans booked in Jan-Mar was at 10.10 million as against 7.87 million year ago, a growth of 36%. Assets under management of the lender grew by 26% to INR 4.17 trillion. The assets grew by INR 186.18 billion in the Jan-Mar quarter alone. 

 

The consolidated top line in Jan-Mar rose to INR 184.57 billion. The net interest income of Bajaj Finance rose by 22% in Jan-Mar to INR 98.07 billion. The net total income rose 23% on year to INR 119.17 billion in the reporting quarter. A lower tax burden, by INR 1 billion from the year-ago period, boosted the bottomline at a time when expenses rose at a faster pace than the total income, at over 30% on year to INR 45.46 billion in Jan-Mar.

 

On the asset quality front, the consolidated gross non-performing assets ratio improved to 0.96% on Mar. 31 from 1.12% a quarter ago and 0.85% a year ago. The consolidated net NPA ratio was 0.44% at the end of March, against 0.48% as of Dec. 31 and 0.37% a year ago. Loan losses and provisions in Jan-Mar surged to INR 23.29 billion compared with INR 13.10 billion a year ago. The company said it had made an additional provision of INR 3.59 billion for the redevelopment of its expected credit loss model.

 

In the reporting quarter, net increase in stage-2 and stage-3 assets was INR 2.89 billion, down from INR 6.08 billion a quarter ago. "The company has started seeing improvement in early vintages across all portfolios," Bajaj Finance said in its investor presentation. The provisioning coverage ratio on stage 3 assets was 54% as on Mar. 31.

 

The deposit book of the company grew 19% on year to INR 714.03 billion as of Mar. 31. In Jan-Mar, the deposits grew by INR 26.06 billion, a similar pace to the previous quarter. Deposits accounted for 20% of the consolidated borrowings as of Mar. 31, with the lender's strategy that it would rise to 25% with a focus on long-term borrowings.

 

Cost of funds rose by 3 basis points on quarter to 7.99% in Jan-Mar. "The company expects cost of funds to gradually go down to 7.75-7.85% by end of FY26", it said. Credit costs, excluding one-time items, was at 2.07%, above its guidance of 1.75-1.85%. Liquidity buffer for the non-bank lender stood at INR 187.54 billion as of Mar. 31, a rise of around INR 50 billion from December-end.

 

For the financial year ended March, the company reported a consolidated net profit of INR 166.38 billion, up 15.1% on year, on a total revenue from operations of nearly INR 697 billion, up from around INR 550 billion. "The company also saw margin compression of 49 bps versus 30-40 bps due to delay in interest rate cut as compared to internal projection. As a result profit growth was subdued," the investor presentation said.

 

Bajaj Finance has given a long-term guidance of 25-27% for growth in assets under management and 23-24% growth in profit. It is optimistic for profit growth in FY26, confident of adding 14 million-16 million customers and AUM growth of 24-25%. Guidance by the company for gross non-performing asset ratio is in the range of 1.2-1.4% and for net NPA ratio 0.4-0.5%, both of which may be lower in the current financial year. As for profitability metrics, the company guided for return on assets in the 4.4-4.6% and a return on equity of 19-20% in FY26.

 

As of Mar. 31, Bajaj Finance's customer franchise stood at 101.82 million. The company added 4.70 million customers to its franchise in Jan-Mar, with net additions in FY25 at 18.18 million, higher than the 17 million the company guided for in January. The lender added 137 standalone gold loan branches and 30 standalone microfinance branches in the reporting quarter. In addition, Bajaj Finance said its transformation towards financial artificial intelligence products was progressing well.

 

"The Company will deploy AI use cases across revenue, cost, customer engagement, underwriting, productivity and controllership. The company estimates to deploy over 100 AI applications in FY26," the investor presentation said.

 

Among the subsidiaries, Bajaj Housing Finance Ltd.'s assets under management grew by 26% on year to INR 1.15 trillion as on Mar. 31. Home loans made up about 58% of the loan book. The net interest income of the company grew 31% on year to INR 8.23 billion in Jan-Mar and the profit after tax grew by 54% to INR 5.87 billion. Bajaj Financial Securities Ltd.'s margin trading facility assets under management rose 18% on year to INR 45.05 billion as on Dec. 31, down from INR 53.92 billion on Dec. 31.  End

 

Edited by Akul Nishant Akhoury

 

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