AUM
INR 3,30,600 crore
+34% YoY
AUM grew 34% year-on-year to INR 3,30,600 crore, driven by strong disbursements across segments.
BAJFINANCE
Financial Services
24 Apr 2024
Bajaj Finance Ltd — Q4 FY24
Bajaj Finance reported a solid Q4 FY24 with AUM growth of 34% to INR 3,30,600 crore and PAT of INR 3,825.8 crore, up 21% YoY.
✓ Verified against BSE filing
2-Minute Summary
✦ AI-Generated from Full Transcript
Bajaj Finance reported a solid Q4 FY24 with AUM growth of 34% to INR 3,30,600 crore and PAT of INR 3,825.8 crore, up 21% YoY. Customer additions remained strong at 3.23 million, though loan bookings were impacted by RBI restrictions on eCOM and Insta EMI Card products. Rural B2C credit stress persisted, leading to slower growth in that segment. Management guided for FY25 as a normalization year, with AUM growth of 26%-28%, NIM compression of 30-40 bps over two quarters, and credit costs within 175-185 bps. OpEx-to-income is expected to improve by 20-40 bps. Key risks include delayed lifting of regulatory restrictions and elevated competitive intensity in mortgages.
बजाज फाइनेंस ने वित्त वर्ष 2024 की चौथी तिमाही में मजबूत प्रदर्शन किया। कुल संपत्ति (AUM) 34% बढ़कर 3,30,600 करोड़ रुपये हो गई। शुद्ध लाभ (PAT) 3,825.8 करोड़ रुपये रहा, जो पिछले साल से 21% अधिक है। 3.23 मिलियन नए ग्राहक जुड़े, लेकिन RBI के प्रतिबंधों के कारण ईकॉम और इंस्टा ईएमआई कार्ड पर लोन बुकिंग प्रभावित हुई। ग्रामीण क्षेत्रों में कर्ज वसूली में दिक्कतें बनी रहीं, जिससे वहां वृद्धि धीमी रही। कंपनी का अनुमान है कि वित्त वर्ष 2025 सामान्यीकरण का साल होगा। संपत्ति में 26-28% वृद्धि, ब्याज मार्जिन (NIM) में दो तिमाहियों में 30-40 आधार अंकों की गिरावट, और कर्ज खर्च 175-185 आधार अंकों के बीच रहने का अनुमान है। खर्च-से-आय अनुपात में 20-40 आधार अंकों का सुधार होगा। मुख्य जोखिमों में नियामकीय प्रतिबंधों में देरी और होम लोन में बढ़ती प्रतिस्पर्धा शामिल है।
Key Numbers
New Customers Added
3.23 million
+14.5 million FY24
Added 3.23 million new customers in Q4, contributing to a record 14.5 million for the full year.
Net NPA
0.37%
-20bps YoY
Net NPA improved to 0.37%, the lowest in company history, reflecting strong asset quality.
Cost of Funds
7.86%
+10bps QoQ
Cost of funds inched up 10 bps sequentially to 7.86%, with expectations of peaking by mid-FY25.
What Changed vs Last Quarter
NEW
AUM growth of 26%-28% in FY25
Management expects AUM to grow 26%-28% in FY25, supported by newly launched secured businesses like LAP, car finance, and tractor finance.
NEW
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.
NEW
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.
UPDATED
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.
DROPPED
Interest rate hike of 20-30 bps from January 1
Effective January 1, the company increased interest rates by 20-30 basis points across portfolios to mitigate higher cost of funds and risk weights.
DROPPED
Rural B2C growth slowed to 10%
Rural B2C portfolio growth was deliberately reduced to 10% in Q3 from 26% in Q1, reflecting risk actions to control elevated delinquencies.
DROPPED
KFS compliance for all products by March 2024
The company plans to implement Key Fact Statement (KFS) in vernacular languages and digital signatures for all products by March 2024.
NEW RISK
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.
NEW RISK
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.
RISK GONE
Urban B2C delinquency uptick may not be transient
Analyst questioned whether rising delinquencies in urban B2C could persist. Management called it 'transient' but acknowledged preventive cuts of INR 450-500 crore quarterly.
RISK GONE
Co-branded credit card renewal risk
RBI granted only a one-year renewal for the RBL Bank co-branded card partnership due to deficiencies. Management is engaging with RBI to resolve issues.
🤫 Topics management stopped discussing
Mentioned in Q1 FY24, Q3 FY24
Management expects annualized loan losses to average AUM to remain in the 175-185 basis points range, consistent with pre-COVID levels.
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 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%.
Management Guidance
AUM growth of 26%-28% in FY25
Management expects AUM to grow 26%-28% in FY25, supported by newly launched secured businesses like LAP, car finance, and tractor finance.
Management guidance growthNIM 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.
Management guidance marginsOpEx-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.
Management guidance marginsCredit 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.
Management guidance otherKey Risks
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.
high · management_commentaryRural 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.
medium · management_commentaryIntense 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.
medium · analyst_questionPotential 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.
low · management_commentaryNotable Quotes
We expect FY 25, the way we see it at this point in time, to be a year of normalization to pre-COVID metrics.
Rural B2C, growth actually came down from 25% on a AUM growth basis to 6% in March 2024. So clearly, we still don't have a full handle on rural B2C.
If I may use the word in a lighter vein, the madness in terms of competitive activity in the mortgage space.
Frequently Asked Questions
What was Bajaj Finance's revenue in Q4 FY24?
Bajaj Finance reported revenue of — in Q4 FY24, representing a — change compared to the same quarter last year.
What guidance did Bajaj Finance management give for FY25?
AUM growth of 26%-28% in FY25: Management expects AUM to grow 26%-28% in FY25, supported by newly launched secured businesses like LAP, car finance, and tractor finance. 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. 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. 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.
What are the key risks for Bajaj Finance in FY25?
Key risks include 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.; 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.; 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.; 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..
Did Bajaj Finance meet its previous quarter's guidance?
Of 4 tracked promises, management 0 met, 0 close, 4 missed.
Where can I read the full Bajaj Finance Q4 FY24 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.