Bajaj Finance Q2 Results: Profit Rises by 13% to ₹4,014 Crore

Bajaj Finance reported its Q2 results for the quarter ended September 30, 2024, showcasing a 13% increase in consolidated net profit to ₹4,014 crore. The company’s total consolidated income grew 28% to ₹17,095 crore, driven by robust growth in its net interest income (NII), which rose 23% YoY to ₹8,838 crore. The AUM clocked a growth of 29% to Rs 3.73 lakh crore.    

Quick Insights:

• Revenue:  ₹17,095 crore, up by 28% YoY.
• Net Profit: ₹4,014 crore, a 13% increase from ₹3,551 crore last year.
• EPS: ₹64.6 up by 10.2% YoY.
• Segment Performance: The AUM of car loans surged 128% year-on-year to ₹9,906 crore, while gold loans grew by 74% to ₹6,363 crore.
• Management's Take: Strong growth across key segments, with urban B2C loans and mortgages leading the way. Outlook remains positive
• Stock Reaction: Shares surged over 6%, trading at ₹7,098.85 on the NSE, reaching the intraday high. 

Management Commentary:

"We forecast that on a 12-month basis, a 25 basis point drop in repo rate should clearly lead to a 10-12 basis point improvement in NIMs. However, we would like to use the improvement in NIMs to our advantage to grow the secured segment," Managing Director, Rajeev Jain said.

Bajaj Finance saw a deterioration in its asset quality, with the Gross Non-Performing Assets (GNPA) ratio increasing to 1.06% from 0.86% in the previous quarter and 0.91% in the same period last year. Similarly, the Net Non-Performing Assets (NNPA) ratio rose to 0.46%, compared to 0.38% last quarter and 0.31% a year earlier. The provisioning coverage ratio for stage 3 assets stood at 57%.

During the post-earnings call, management expressed cautious optimism about asset quality, stating confidence that it is expected to improve in the coming quarters.

Also check List of Bajaj Group Stocks

Stock Market Reaction:

Shares of Bajaj Finance surged as much as 6.30%, reaching an intraday high of ₹7,098.85 on the NSE before settling at ₹7,004.85, up by 4.90%. The stock was among the top gainers on both the BSE Sensex and NSE Nifty indices as of today.

About Bajaj Finance Ltd

Bajaj Finance is one of India’s leading non-banking financial companies (NBFC), engaged in lending across multiple sectors including retail, SME, and commercial. The company also offers a variety of financial products and services to its customers.

The management anticipates a 27-28% year-on-year growth in AUM for the 2024-25 fiscal year (April-March), despite challenges in the rural B2C segment and plans to gradually phase out its two-wheeler financing operations. This positive outlook is driven by the company's new business lines, which are now contributing 2-3% to AUM growth.