Bajaj Finance (BAJFINANCE) Q1 24/25 earnings summary

Executive summary

• Q1 FY25 saw strong growth in AUM, new loans, and customer additions, with AUM up ₹354,192 crore (31% YoY), 10.97 million new loans booked, and 4.47 million new customers added; customer franchise reached 88.11 million.

• RBI lifted restrictions on eCOM and Insta EMI Card loans in May 2024, enabling full resumption of these businesses by mid-June.

• Loan losses were elevated due to muted collection efficiencies, particularly during the election period, but operating efficiencies and portfolio metrics remained robust.

Financial highlights

• Consolidated AUM grew 31% YoY to ₹354,192 crore as of June 30, 2024; PAT up 14% YoY to ₹3,912 crore; ROE at 19.9%, annualized ROA at 4.63%.

• Net interest income rose 25% to ₹8,365 crore; net total income up 24% to ₹10,418 crore.

• Loan losses and provisions rose 69% to ₹1,685 crore; gross loan loss to average AUM at 2.12%, net at 1.99%.

• OPEX to net total income at 33.3% (down from 34% in Q1 FY24).

• Liquidity buffer at ₹16,235 crore; deposit book up 26% YoY to just under ₹63,000 crore, contributing 20% to consolidated borrowings.

Outlook and guidance

• Credit cost guidance for FY25 maintained at 1.75%-1.85% with marginal upward bias; improvement expected in H2.

• Full-year AUM growth guidance remains at 26%-28% with upward bias; long-term guidance: AUM growth 25%-27%, profit growth 23%-24%, GNPA 1.2%-1.4%, NNPA 0.4%-0.5%, ROA 4.6%-4.8%, ROE 21%-23%.

• NIM expected to stabilize from Q3 onwards; cost of funds likely to peak by August/September.