Bajaj Finance Q1 Results Review - Credit Cost Key Monitorable: Yes Securities

Yes Securities Report

Bajaj Finance Ltd.’s 2% miss on profit after tax versus our estimate was essentially driven by higher-than anticipated credit cost, as the co.’s net interest income/pre-provision operating profit was better than our expectation.

Credit cost was elevated at annualized 2% owing to lower collection efficiencies in the regular and initial delinquency buckets, which drove significant flows into Stage-II assets (increased 21.5% QoQ, and the rise was across products).

Gross/net non-performing loans ratios were stable QoQ and YoY. N et interest margin compression in Q1 FY25 over Q4 FY24 was 23 bps, with 13 bps contributed by cost of funds and 10 bps by AUM composition (higher growth in secured consumer and SME/commercial lending).

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