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View Claim Ledger →Bajaj Finance Ltd — Q2 FY25
Bajaj Finance reported a mixed Q2 FY25 with AUM growth of 29% YoY and PAT up 13% to INR 4,014 crore, but elevated credit costs dampened profitability.
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Bajaj Finance reported a mixed Q2 FY25 with AUM growth of 29% YoY and PAT up 13% to INR 4,014 crore, but elevated credit costs dampened profitability. Loan losses remained high at 2.16% of average assets, driven by higher flow rates across retail and SME portfolios, though Stage 2/3 additions moderated sequentially. Management guided FY25 credit costs to ~2.05%, above the earlier 1.75-1.85% range, but expects improvement to 2% by Q4. NIMs have stabilized, and cost of funds appears to have peaked. The company added 4 million new customers and expects to cross 100 million total customers by year-end. Festive season demand is tracking well with 21% volume growth. Key risk: credit normalization may take longer if macroeconomic conditions deteriorate or if unsecured lending stress persists.
बजाज फाइनेंस ने दूसरी तिमाही में मिला-जुला प्रदर्शन दिखाया। कंपनी का कुल कर्ज 29% बढ़ा और मुनाफा 13% बढ़कर 4,014 करोड़ रुपये हुआ। लेकिन कर्ज वसूली में परेशानी के कारण मुनाफा कम हुआ। खराब कर्ज का अनुपात 2.16% रहा, जो छोटे और बड़े कर्ज दोनों में बढ़ा। कंपनी ने कहा कि अब खराब कर्ज घटने लगा है। उन्होंने अनुमान लगाया कि पूरे साल खराब कर्ज 2.05% रहेगा, जो पहले के अनुमान 1.75-1.85% से ज्यादा है। लेकिन चौथी तिमाही तक यह 2% तक आ सकता है। ब्याज दरें स्थिर हो गई हैं। कंपनी ने 40 लाख नए ग्राहक जोड़े और साल के अंत तक 10 करोड़ ग्राहक पार करने की उम्मीद है। त्योहारी सीजन में 21% ज्यादा बिक्री हुई। खतरा: अगर अर्थव्यवस्था खराब होती है या छोटे कर्ज में परेशानी बढ़ती है, तो कर्ज वसूली में और समय लग सकता है।
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Elevated credit costs may persist
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Read Transcript →Quarter Snapshot
AUM
INR 3,74,000 crore
+29% YoY
Consolidated AUM grew 29% year-on-year, driven by strong volumes and new business contributions.
New Loans Booked
9.7 million
+14% YoY
Loan bookings increased 14% YoY to 9.7 million, reflecting robust demand across segments.
Customer Franchise
92.1 million
+4 million QoQ
Customer base grew to 92.1 million, with 4 million new customers added in Q2.
Gross Loan Loss to Average AUF
2.16%
+4bps QoQ
Credit costs remained elevated at 2.16%, with management expecting a decline to ~2% by Q4.
What Changed vs Last Quarter
NEW
FY25 credit cost guidance revised to ~2.05%
Net loan loss to average assets expected at 2.00-2.05% for FY25, up from earlier 1.75-1.85%.
NEW
New customer addition of 15-16 million in FY25
Management expects to add 15-16 million new customers in FY25, marginally higher than last year's 14 million.
NEW
Non-Bajaj Auto two-wheeler AUM to replace Bajaj Auto AUM by FY27
Non-Bajaj Auto two-wheeler financing will scale to 720,000 accounts in FY26, fully replacing Bajaj Auto AUM by end-FY26/FY27.
UPDATED
AUM growth of 27-28% for FY25
Full-year AUM growth guided at 27-28%, with new businesses contributing 2-3%.
DROPPED
NIM compression of 30-40 bps over next two quarters
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.
DROPPED
OpEx-to-income improvement of 20-40 bps
Operating expense to net interest income ratio is expected to improve by 20-40 bps from current levels as the company moves to consolidation.
DROPPED
Credit costs within 175-185 bps corridor
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.
NEW RISK
Elevated credit costs may persist
Credit costs remain above long-term averages; management is cautiously optimistic but normalization may take longer if macro conditions worsen.
NEW RISK
Unsecured lending stress from multiple loans
Clients with 3+ live unsecured loans show higher default propensity; supply-side slowdown may not fully mitigate risk.
NEW RISK
Loss of Bajaj Auto captive financing business
Bajaj Auto's captive financing unit is taking over two-wheeler/three-wheeler financing, impacting AUM and profitability in the near term.
NEW RISK
Regulatory and compliance risks
Management declined to comment on regulatory matters; ongoing investments in compliance may not fully mitigate future actions.
RISK GONE
RBI restrictions on eCOM and Insta EMI Card not yet lifted
The embargo on two products continues to impact loan bookings and AUM growth; timing of removal is uncertain.
RISK GONE
Rural B2C credit stress persists
Rural B2C business continues to show elevated loan losses, leading to slower growth; management has slowed AUM growth to 6% but risk remains.
RISK GONE
Intense competition in mortgage space pressuring BHFL margins
Management noted 'madness' in mortgage competition, with home loans being distributed at 8.4-8.5% against borrowing costs of 8.3%, squeezing NIMs.
RISK GONE
Potential ROE drag from excess capital
Management acknowledged that ROE in FY25 may marginally decline due to the recent capital raise, as excess capital sits on the balance sheet.
🤫 Topics management stopped discussing
Mentioned in Q1 FY24, Q2 FY24, Q4 FY24
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.
Mentioned in Q1 FY24, Q3 FY24, Q4 FY24
Rural B2C business continues to show elevated loan losses, leading to slower growth; management has slowed AUM growth to 6% but risk remains.
Mentioned in Q1 FY24, Q2 FY24
Cost of funds is expected to rise as low-cost borrowings mature and are replaced at higher rates, compressing NIM by 25-30 bps for the full year.
Mentioned in Q3 FY24, Q4 FY24
The embargo on two products continues to impact loan bookings and AUM growth; timing of removal is uncertain.
Mentioned in Q1 FY24, Q2 FY24
Management flagged that customers with multiple small-ticket loans (<₹50,000) show higher imprudence and default rates, prompting portfolio cuts of 8-14%.
Fast read
Guidance and risk preview
Net loan loss to average assets expected at 2.00-2.05% for FY25, up from earlier 1.75-1.85%.
Credit costs remain above long-term averages; management is cautiously optimistic but normalization may take longer if macro conditions worsen.
View Risks →