New loans booked
12 million
+? YoY
Highest ever quarterly new loan bookings, indicating strong demand momentum.
BAJFINANCE
Financial Services
15 Jan 2025
Bajaj Finance Ltd — Q3 FY25
Bajaj Finance reported a solid Q3 FY25 with PAT of ₹4,308 crore (+18% YoY) and AUM growth of 28% YoY to ₹3.98 lakh crore.
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2-Minute Summary
✦ AI-Generated from Full Transcript
Bajaj Finance reported a solid Q3 FY25 with PAT of ₹4,308 crore (+18% YoY) and AUM growth of 28% YoY to ₹3.98 lakh crore. New loan bookings hit a record 12 million and customer franchise reached 97.12 million, on track to cross 100 million by year-end. Credit costs stabilized at 2.16% of average AUM, with management guiding Q4 credit cost to 2.00-2.05% and FY26 below 2%. Operating efficiency improved as OpEx-to-NTI fell to 33.1% from 33.9% a year ago. However, asset quality remains under watch: Stage 2 and Stage 3 formations are still elevated, particularly in urban B2C and two-wheeler portfolios. The company is proactively pruning risky segments and expects credit normalization by Q4. The strategic partnership with Bharti Airtel and the FinAI transformation (BFL 3.0) are key medium-term growth drivers. Risk: A sharper-than-expected economic slowdown could delay credit cost recovery and pressure growth.
बजाज फाइनेंस ने तीसरी तिमाही में अच्छा प्रदर्शन किया। कंपनी का मुनाफा 4,308 करोड़ रुपये रहा, जो पिछले साल से 18% ज्यादा है। इसके कुल कर्ज (AUM) में 28% की बढ़ोतरी हुई और यह 3.98 लाख करोड़ रुपये हो गया। नए कर्ज देने का रिकॉर्ड 1.2 करोड़ लोगों को हुआ और ग्राहक संख्या 9.71 करोड़ पहुंच गई, जो साल के अंत तक 10 करोड़ पार कर सकती है। कंपनी का खर्च कम हुआ है और बुरे कर्ज पर नियंत्रण बढ़ रहा है। हालांकि, शहरी इलाकों और दोपहिया वाहनों के कर्ज में कुछ समस्या अब भी है। कंपनी इसे सुधारने की कोशिश कर रही है। भारती एयरटेल के साथ साझेदारी और नई तकनीक (BFL 3.0) से भविष्य में और वृद्धि होगी। लेकिन अगर अर्थव्यवस्था धीमी पड़ी तो कर्ज वसूली पर असर पड़ सकता है।
Key Numbers
Customer franchise
97.12 million
+? YoY
On track to cross 100 million by FY25-end, a major milestone.
AUM
₹3.98 lakh crore
+28% YoY
Strong AUM growth driven by new car loans and secured products.
Net NPA
48 bps
+11 bps YoY
Slight increase from 37 bps last year, but within medium-term guidance.
What Changed vs Last Quarter
NEW
FY26 credit cost below 2%
If Q4 credit cost lands in the guided range, management expects FY26 credit cost to be sub-2%, barring significant macro deterioration.
NEW
FY26 balance sheet growth of ~25%
Management targets consolidated balance sheet growth of around 25% in FY26, with profit growth of 22-23%.
NEW
Rural B2C business to grow 20-23% in FY26
After returning to growth mode, the rural B2C segment is expected to grow 20-23% in the next fiscal year.
UPDATED
Q4 FY25 credit cost guidance of 2.00-2.05%
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.
DROPPED
AUM growth of 27-28% for FY25
Full-year AUM growth guided at 27-28%, with new businesses contributing 2-3%.
DROPPED
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.
DROPPED
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.
NEW RISK
Urban B2C collection efficiency still weak
Despite lower default rates, collection efficiency in urban B2C remains below normal, and management expects this segment to take the longest to normalize.
NEW RISK
Two-wheeler portfolio deterioration
The two-wheeler and three-wheeler portfolio is classified as 'amber' with Stage 2 rising from 3.83% to 5.53% YoY, though part of the degradation is due to portfolio degrowth.
NEW RISK
Pricing pressure across lending segments
Management acknowledged that pricing pressure has intensified as credit growth slows, which could compress NIMs if not offset by operating leverage.
NEW RISK
Economic slowdown risk
Management flagged that high-frequency data shows the economy slowing, which could worsen asset quality and delay credit cost recovery.
RISK GONE
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.
RISK GONE
Unsecured lending stress from multiple loans
Clients with 3+ live unsecured loans show higher default propensity; supply-side slowdown may not fully mitigate risk.
RISK GONE
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.
RISK GONE
Regulatory and compliance risks
Management declined to comment on regulatory matters; ongoing investments in compliance may not fully mitigate future actions.
🤫 Topics management stopped discussing
Mentioned in Q1 FY24, Q2 FY25, Q4 FY24
Full-year AUM growth guided at 27-28%, with new businesses contributing 2-3%.
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.
Management Guidance
Q4 FY25 credit cost guidance of 2.00-2.05%
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.
Management guidance marginsFY26 credit cost below 2%
If Q4 credit cost lands in the guided range, management expects FY26 credit cost to be sub-2%, barring significant macro deterioration.
Management guidance marginsFY26 balance sheet growth of ~25%
Management targets consolidated balance sheet growth of around 25% in FY26, with profit growth of 22-23%.
Management guidance growthRural B2C business to grow 20-23% in FY26
After returning to growth mode, the rural B2C segment is expected to grow 20-23% in the next fiscal year.
Management guidance growthKey Risks
Urban B2C collection efficiency still weak
Despite lower default rates, collection efficiency in urban B2C remains below normal, and management expects this segment to take the longest to normalize.
medium · management_commentaryTwo-wheeler portfolio deterioration
The two-wheeler and three-wheeler portfolio is classified as 'amber' with Stage 2 rising from 3.83% to 5.53% YoY, though part of the degradation is due to portfolio degrowth.
medium · management_commentaryPricing pressure across lending segments
Management acknowledged that pricing pressure has intensified as credit growth slows, which could compress NIMs if not offset by operating leverage.
medium · analyst_questionEconomic slowdown risk
Management flagged that high-frequency data shows the economy slowing, which could worsen asset quality and delay credit cost recovery.
high · management_commentaryNotable Quotes
Loan losses have begun to stabilize, or have rather stabilized. Came in flat in terms of percentage points virtually between Q2 and Q3.
We are well on course to cross 100 million customer franchise. It'll be a big milestone, I would say, for us as a firm.
We have pruned businesses. We've talked about it over the last two quarters. Three businesses I would flag out. The largest increase in contribution was two-wheeler. That's a winding down book.
Frequently Asked Questions
What was Bajaj Finance's revenue in Q3 FY25?
Bajaj Finance reported revenue of — in Q3 FY25, representing a — change compared to the same quarter last year.
What guidance did Bajaj Finance management give for FY26?
Q4 FY25 credit cost guidance of 2.00-2.05%: 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. FY26 credit cost below 2%: If Q4 credit cost lands in the guided range, management expects FY26 credit cost to be sub-2%, barring significant macro deterioration. FY26 balance sheet growth of ~25%: Management targets consolidated balance sheet growth of around 25% in FY26, with profit growth of 22-23%. Rural B2C business to grow 20-23% in FY26: After returning to growth mode, the rural B2C segment is expected to grow 20-23% in the next fiscal year.
What are the key risks for Bajaj Finance in FY26?
Key risks include Urban B2C collection efficiency still weak — Despite lower default rates, collection efficiency in urban B2C remains below normal, and management expects this segment to take the longest to normalize.; Two-wheeler portfolio deterioration — The two-wheeler and three-wheeler portfolio is classified as 'amber' with Stage 2 rising from 3.83% to 5.53% YoY, though part of the degradation is due to portfolio degrowth.; Pricing pressure across lending segments — Management acknowledged that pricing pressure has intensified as credit growth slows, which could compress NIMs if not offset by operating leverage.; Economic slowdown risk — Management flagged that high-frequency data shows the economy slowing, which could worsen asset quality and delay credit cost recovery..
Did Bajaj Finance meet its previous quarter's guidance?
Of 1 tracked promise, management 0 met, 0 close, 1 missed.
Where can I read the full Bajaj Finance Q3 FY25 concall transcript?
The full earnings conference call transcript or source release is available on the linked source material. This page provides an AI-generated summary with filing verification status shown on the financial stats.