Bajaj Finance Management Guidance Tracker

Management raised full-year AUM growth guidance from 27-29% to 29-31%, driven by strong Q1 momentum.

New car financing business, launched in 80 cities, is expected to achieve monthly disbursements of INR 200-250 crore by exit of FY24.

Rural B2C portfolio growth was deliberately reduced to 10% in Q3 from 26% in Q1, reflecting risk actions to control elevated delinquencies.

Management expects AUM to grow 26%-28% in FY25, supported by newly launched secured businesses like LAP, car finance, and tractor finance.

Full-year AUM growth guided at 27-28%, with new businesses contributing 2-3%.

Management expects to add 15-16 million new customers in FY25, marginally higher than last year's 14 million.

Management targets consolidated balance sheet growth of around 25% in FY26, with profit growth of 22-23%.

After returning to growth mode, the rural B2C segment is expected to grow 20-23% in the next fiscal year.

Aided by new business lines launched in the last 2-3 years, with a focus on credit quality first.

Full-year credit cost expected to be range-bound between 155-165 bps, including 6-8 bps from model redevelopment.

Net interest margin expected to compress by 10-15 bps each in Q2 and Q3 due to repricing of borrowings.

Management guided for another 25-30 basis points of NIM compression over the remainder of FY24, driven by rising cost of funds and competitive pressure on yields.

Despite NIM compression, the company expects to sustain a return on assets of 5% on an exit basis for FY24, supported by operating leverage.

Management expects annualized loan losses to average AUM to remain in the 175-185 basis points range, consistent with pre-COVID levels.

Net interest margin is expected to moderate by 30-40 bps from current levels due to rising cost of funds and shift to secured assets, then stabilize.

Operating expense to net interest income ratio is expected to improve by 20-40 bps from current levels as the company moves to consolidation.

Net loan loss to average assets expected at 2.00-2.05% for FY25, up from earlier 1.75-1.85%.

Management expects loan loss to average AUF to decline to 2.00-2.05% in Q4, from 2.16% in Q3, driven by portfolio pruning and improving collection efficiency.

If Q4 credit cost lands in the guided range, management expects FY26 credit cost to be sub-2%, barring significant macro deterioration.

Loan loss to average AUM expected to improve from FY25 levels as early vintage metrics improve.

Driven by FinAI transformation and productivity initiatives, including fixed-term contract conversions.

The microfinance pilot launched in 12 villages will scale to 100 locations by March 2024, with a target of 300 villages by March 2025.

Non-Bajaj Auto two-wheeler financing will scale to 720,000 accounts in FY26, fully replacing Bajaj Auto AUM by end-FY26/FY27.

Board approved raising ₹10,000 crore, comprising ₹8,800 crore through QIP and ₹1,200 crore preferential allotment to Bajaj Finserv, to support growth.

The company plans to implement Key Fact Statement (KFS) in vernacular languages and digital signatures for all products by March 2024.

Loan loss to average AUM is expected to remain in the 175-185 bps range, in line with pre-COVID levels adjusted for regulatory changes.

Effective January 1, the company increased interest rates by 20-30 basis points across portfolios to mitigate higher cost of funds and risk weights.

Across revenue, cost, customer engagement, underwriting, productivity, and controllership.