New loans booked
10.7M
+4.7M QoQ
Record quarterly loan bookings driven by strong customer acquisition.
BAJFINANCE
Financial Services
15 Apr 2025
Bajaj Finance Ltd — Q4 FY25
Bajaj Finance reported a mixed Q4 FY25 with strong AUM growth of 26% to INR 416,061 crore and record loan bookings of 10.7 million, but PAT growth of 19% to INR 4,546 crore was aided by a one-time tax reversal of INR 348 crore.
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2-Minute Summary
✦ AI-Generated from Full Transcript
Bajaj Finance reported a mixed Q4 FY25 with strong AUM growth of 26% to INR 416,061 crore and record loan bookings of 10.7 million, but PAT growth of 19% to INR 4,546 crore was aided by a one-time tax reversal of INR 348 crore. Credit costs remained elevated at 2.33% (1.97% adjusted for ECL model refresh), leading to a miss on earlier guidance. Management guided for FY26 AUM growth of 24-25%, credit cost of 185-195 bps, and stable NIMs, with optimism on profit growth. Key risks include delayed rate cuts impacting NIMs and elevated credit costs in unsecured portfolios. The company is focusing on credit quality and FinAI transformation to improve operating leverage.
बजाज फाइनेंस ने वित्त वर्ष 2025 की चौथी तिमाही में मिला-जुला प्रदर्शन दिखाया। कंपनी के कुल कर्ज (AUM) में 26% की बढ़ोतरी हुई, जो 4,16,061 करोड़ रुपये हो गया। साथ ही, 1.07 करोड़ नए कर्ज दिए गए, जो एक रिकॉर्ड है। मुनाफा (PAT) 19% बढ़कर 4,546 करोड़ रुपये हुआ, लेकिन इसमें 348 करोड़ रुपये का एकमुश्त टैक्स फायदा शामिल है। कर्ज वसूली में लागत (credit cost) 2.33% रही, जो पहले के अनुमान से ज्यादा है। अगले वित्त वर्ष में कंपनी को 24-25% कर्ज वृद्धि, 1.85-1.95% कर्ज लागत और स्थिर ब्याज आय (NIM) की उम्मीद है। मुनाफा बढ़ने की संभावना है, लेकिन ब्याज दरों में कमी न होने और छोटे कर्जों में बढ़ती लागत से जोखिम है। कंपनी कर्ज गुणवत्ता और डिजिटल बदलाव पर ध्यान दे रही है।
Key Numbers
Customer franchise
102M
+18.88M YoY
Total customer base crossed 100 million, with 4.7 million new customers added in Q4.
Gold loan branches
964
+137 QoQ
Aggressive expansion in gold loan business, reflecting strategic focus on secured lending.
Cost of funds
7.99%
+3bps QoQ
Marginal increase; management expects gradual decline to 7.75-7.85% by FY26 end.
What Changed vs Last Quarter
NEW
AUM growth of 24-25% in FY26
Aided by new business lines launched in the last 2-3 years, with a focus on credit quality first.
NEW
OPEX to NTI improvement of 40-50 bps in FY26
Driven by FinAI transformation and productivity initiatives, including fixed-term contract conversions.
NEW
Deploy 100 FinAI applications in FY26
Across revenue, cost, customer engagement, underwriting, productivity, and controllership.
UPDATED
Credit cost corridor of 185-195 bps for FY26
Loan loss to average AUM expected to improve from FY25 levels as early vintage metrics improve.
DROPPED
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
FY26 balance sheet growth of ~25%
Management targets consolidated balance sheet growth of around 25% in FY26, with profit growth of 22-23%.
DROPPED
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.
NEW RISK
Elevated credit costs in unsecured portfolios
Credit cost guidance of 185-195 bps remains above pre-COVID levels, with urban personal loan portfolio still maturing.
NEW RISK
NIM compression from fee moderation and delayed rate cuts
Management expects stable NIMs, but fee income growth is moderated to 13-15% and cost of fund benefits may be slower than anticipated.
NEW RISK
Surplus capital weighing on ROE
Excess capital from BHFL listing and QIP is pressuring ROE; long-term ROE guidance reduced to 19-21% from 21-23%.
NEW RISK
Two-wheeler/three-wheeler captive book wind-down risk
The winding-down captive portfolio (INR 10,000 crore) contributes disproportionately to credit costs; any delay in wind-down could impact asset quality.
RISK GONE
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.
RISK GONE
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.
RISK GONE
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.
RISK GONE
Economic slowdown risk
Management flagged that high-frequency data shows the economy slowing, which could worsen asset quality and delay credit cost recovery.
🤫 Topics management stopped discussing
Mentioned in Q1 FY24, Q2 FY25, Q3 FY24, Q3 FY25
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.
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 Q1 FY24, Q3 FY25
Management flagged that high-frequency data shows the economy slowing, which could worsen asset quality and delay credit cost recovery.
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
AUM growth of 24-25% in FY26
Aided by new business lines launched in the last 2-3 years, with a focus on credit quality first.
Management guidance growthCredit cost corridor of 185-195 bps for FY26
Loan loss to average AUM expected to improve from FY25 levels as early vintage metrics improve.
Management guidance marginsOPEX to NTI improvement of 40-50 bps in FY26
Driven by FinAI transformation and productivity initiatives, including fixed-term contract conversions.
Management guidance marginsDeploy 100 FinAI applications in FY26
Across revenue, cost, customer engagement, underwriting, productivity, and controllership.
Management guidance ai_strategyKey Risks
Elevated credit costs in unsecured portfolios
Credit cost guidance of 185-195 bps remains above pre-COVID levels, with urban personal loan portfolio still maturing.
high · management_commentaryNIM compression from fee moderation and delayed rate cuts
Management expects stable NIMs, but fee income growth is moderated to 13-15% and cost of fund benefits may be slower than anticipated.
medium · analyst_questionSurplus capital weighing on ROE
Excess capital from BHFL listing and QIP is pressuring ROE; long-term ROE guidance reduced to 19-21% from 21-23%.
medium · management_commentaryTwo-wheeler/three-wheeler captive book wind-down risk
The winding-down captive portfolio (INR 10,000 crore) contributes disproportionately to credit costs; any delay in wind-down could impact asset quality.
low · data_observationNotable Quotes
We are a credit business. We want to make sure credit first and then growth. We'll fix that. We are pretty confident of that.
Our core objective at this stage is first to get to the credit cost corridor, which we have laid out. The early vintage is looking good.
If things were to improve significantly, maybe the model can show ECL release number as well. That's not certain.
Frequently Asked Questions
What was Bajaj Finance's revenue in Q4 FY25?
Bajaj Finance reported revenue of — in Q4 FY25, representing a — change compared to the same quarter last year.
What guidance did Bajaj Finance management give for FY26?
AUM growth of 24-25% in FY26: Aided by new business lines launched in the last 2-3 years, with a focus on credit quality first. Credit cost corridor of 185-195 bps for FY26: Loan loss to average AUM expected to improve from FY25 levels as early vintage metrics improve. OPEX to NTI improvement of 40-50 bps in FY26: Driven by FinAI transformation and productivity initiatives, including fixed-term contract conversions. Deploy 100 FinAI applications in FY26: Across revenue, cost, customer engagement, underwriting, productivity, and controllership.
What are the key risks for Bajaj Finance in FY26?
Key risks include Elevated credit costs in unsecured portfolios — Credit cost guidance of 185-195 bps remains above pre-COVID levels, with urban personal loan portfolio still maturing.; NIM compression from fee moderation and delayed rate cuts — Management expects stable NIMs, but fee income growth is moderated to 13-15% and cost of fund benefits may be slower than anticipated.; Surplus capital weighing on ROE — Excess capital from BHFL listing and QIP is pressuring ROE; long-term ROE guidance reduced to 19-21% from 21-23%.; Two-wheeler/three-wheeler captive book wind-down risk — The winding-down captive portfolio (INR 10,000 crore) contributes disproportionately to credit costs; any delay in wind-down could impact asset quality..
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 Q4 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.