Bajaj Finance Q2 Results Review - Elevated Credit Costs Remain A Drag; Maintain Neutral Rating: Motilal Oswal

Motilal Oswal Report

Bajaj Finance Ltd.’s reported PAT in Q2 FY25 grew 13% YoY to ~Rs 40.1 billion (in line). Net interest income grew 23% YoY to ~Rs 88.4 billion (in line). Non-interest income stood at ~Rs 21.1 billion (+3% QoQ). Fee income was lower QoQ due to the transfer of the collections activity to RBL Bank (in its co-branded credit cards). H1 FY25 PAT grew 13% YoY to ~Rs 79.3 billion and we estimate H2 FY25 PAT to grew 15% YoY.

Bajaj Finance’s Q2 FY25 NIM contracted ~5 bp QoQ to ~9.7%. The company expects that the ~25 bp reduction in repo rates will lead to a ~10-12 bp expansion in the NIM. However, the company plans to leverage the NIM expansion to support the growth of some of its newer lines of business launched over the past two years. We estimate NIM at 9.8%/9.9% in FY25/FY26.

The company has guided for AUM growth of ~27-28% in FY25, with newer businesses contributing 2-3% to this growth, while existing businesses are expected to grow at ~24-25% YoY in FY25. In the medium term, it has guided for AUM growth of ~25-27%.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.