Bajaj Finance (BAJFINANCE) Q1 24/25 earnings summary

Executive summary

• Q1 FY2025 saw strong growth in AUM, volumes, new loans, and customer additions, with AUM up ₹23,600 crore (31% YoY) to ₹3,54,192 crore, 10.97 million new loans booked, and 4.47 million new customers added; digital app users reached 56.79 million.

• RBI lifted restrictions on eCOM and Insta EMI Card loans in May 2024, with full operations resuming 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 ₹3,54,192 crore; deposit book grew 26% to just under ₹63,000 crore.

• Net interest income rose 25% to ₹8,365 crore; net total income up 24% to ₹10,418 crore; PAT grew 14% YoY to ₹3,912 crore, impacted by a one-time deferred tax gain.

• OPEX to net total income improved to 33.2%-33.3%, down from 34% in Q4 FY2024.

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

• ROE at 19.9%, annualized ROA at 4.63%, and capital adequacy at 21.65%.

Outlook and guidance

• Credit cost guidance for FY2025 maintained at 1.75%-1.85% of AUM, with marginal upward bias; improvement in credit costs and collection efficiency expected from Q3 FY2025 onward.

• Growth guidance for FY2025 maintained at 26%-28% AUM growth, with upward bias; long-term AUM growth guidance at 25%-27%.

• Medium-term loan loss expectation set at 175-185 bps.

• Long-term guidance: profit growth 23%-24%, GNPA 1.2%-1.4%, NNPA 0.4%-0.5%, ROA 4.6%-4.8%, ROE 21%-23%.