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...
neutral
high
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Did management answer the analysts?
Every material analyst question, graded on whether management actually answered it — with the verbatim exchange and quantitative claims checked against filed numbers.
71%Questions answered1Evaded / deflected12Questions audited
Partial answer
High priority
Where will AUM growth come from in FY26 and why no NIM expansion with falling rates?
Asked by Chintan Joshi, Autonomous
Answered growth broadly but did not provide the exact reported NIM number asked.
did not give exact NIM numberdeferred to later
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Question
On AUM, if you give us a refresh of where do you think growth will be easier to find and where growth will be challenging to find over FY2026, that would be helpful. On NIM, quick data keeping, what is the exact NIM, reported NIM for the current quarter? Why should we not expect some NIM expansion with falling rates?
Anup Saha, Deputy Managing Director
I think at an overall level, we remain very small... As we plan to grow, I think the growth will come across all businesses... Coming to your second point on NIM... we anticipate that our overall NIM will remain stable.
Answered
Medium priority
Is management being conservative on cost of funds?
Asked by Chintan Joshi, Autonomous
Provided a specific range and acknowledged conservatism.
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Question
Are you saying that you're being a little conservative on the cost of funds? Are you saying you're being a little conservative out here, or is this fair?
Sandeep Jain, CFO
I mean, probably conservative to the extent of 5-7 basis points. Just to be fair in all candor. It is not like it will be instead of 10-15, it could be 30-40 basis points.
Evasive
High priority
What is the reported NIM number for Q4?
Asked by Chintan Joshi, Autonomous
Refused to state the exact NIM, only gave a relative comparison.
did not give exact numbercompared to full year instead
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Question
The reported NIM number?
Sandeep Jain, CFO
Let me tell you that the quarter four NIM number is in fact lower than the full year NIM number for FY25, which means, as Anup made a point, NIM to be stable in FY26, there is some catch-up has to happen in the next year.
Answered
High priority
Why did ECL model refresh cause additional provision and will it reverse?
Asked by Abhishek Murarka, HSBC
Explained the model mechanics and confirmed potential reversals.
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Question
What kind of history do you take? Do you take five years, six years, and why has there been additional provision? Is it that FY 2021 or 2022... have got added, and next year's refresh will probably see some exclusion there?
Rajeev Jain, Managing Director
ECL model assumes that the past is a reflection of future. As a result, it shows up a higher number of provision... If things were to improve in FY2026, should one expect releases to come in future? Answer is yes.
Answered
Medium priority
Is write-off for the quarter around INR 1,700 crore?
Asked by Abhishek Murarka, HSBC
Corrected the number with a specific figure.
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Question
If I back-calculate, your write-off works out to around INR 1,700 crore, is that correct for the quarter? Ballpark?
Rajeev Jain, Managing Director
That number is not necessarily correct. My calculation says that the number is INR 2,100 crore for the quarter.
Partial answer
Medium priority
Can rural B2C grow at 20-25% in FY26?
Asked by Abhishek Murarka, HSBC
Expressed confidence but did not explicitly confirm the 20-25% growth target.
did not confirm specific growth rate
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Question
Just finally, some commentary on growth in rural B2C... Do you see that kind of outlook now? Are you comfortable in that segment going forward?
Rajeev Jain, Managing Director
We remain very confident from here to grow the rural B2C business. We also significantly strengthened our debt management capability in rural.
Partial answer
High priority
Why only 24-25% growth guidance for FY26 despite long-term 25%+ target?
Asked by Kunal Shah, Citigroup
Explained priority on credit cost but did not identify specific segments for slower growth.
did not specify which segments will pull back
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Question
The question on growth, particularly 24-25%-odd, it seems like some things in stance. Till last time, we were pretty confident of achieving the long-term guidance of 25% plus. No doubt, I think you indicated in terms of customer franchise, new businesses. Then why particularly 24-25% growth for the next year?
Anup Saha, Deputy Managing Director
Our core objective at this stage is first to get to the credit cost corridor... Once we get there, we are not saying we will not grow. We see opportunity, we will seize it.
Answered
High priority
Is credit cost guidance of 1.85-1.95% the reason for slower growth?
Asked by Kunal Shah, Citigroup
Provided a clear timeline for credit cost improvement.
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Question
When you give that credit cost guidance of 1.85-1.95%, you still believe it is relatively higher to grow at more than 25%? Or is it like the holding stage two, which has got increased in this quarter, that's something which is worrying you?
Rajeev Jain, Managing Director
The book has to turn fully churned... I would foresee that by third or fourth quarter, we should be lower than our pre-COVID levels.
Answered
High priority
What gives confidence that asset quality will improve next year despite amber signs?
Asked by Zhao Wu Shao, IIFL Securities
Provided specific vintage metrics and comparisons to pre-COVID.
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Question
When I look at the asset quality panels... the amber sign remains where it is in the previous quarter... what gives us this confidence that, say, next year it is going to be much better?
Rajeev Jain, Managing Director
What gives us confidence is what are the early vintages saying? We churn... 18-19 months. Three MOB, six MOB, nine MOB are beginning to look... lower than even pre-COVID.
Partial answer
High priority
Will NIM be flat YoY considering BHFL consolidation and fee moderation?
Asked by Zhao Wu Shao, IIFL Securities
Gave a conditional answer without a firm commitment to flat NIM.
conditional answerdid not explicitly confirm flat YoY
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Question
When you say that the NIMs are going to be kind of stable... On a year-over-year basis, when I look at next year, we will also have the hit from the Bajaj Housing Finance kind of portfolio flowing through... are we confident that the NIMs will be flat?
Sandeep Jain, CFO
I did make a point saying that if 10-15 basis points of cost of an improvement comes through, we should be able to maintain NIM at the current level.
Answered
High priority
Why is ROA corridor widened and how do you explain lower ROE guidance?
Asked by Kunal Shah, Kotak Capital
Explained the impact of surplus capital on ROA and ROE.
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Question
How do you internalize ROA corridor widening and return on equity corridor widening? Because even if you account for dilution of Bajaj Housing Finance, INR 40,000 crore, how do you explain this?
Rajeev Jain, Managing Director
In terms of ROA, we are mindful of the fact that in the last almost more than a year now, we have been sitting on surplus or additional capital... Keeping that in mind, for the medium-term basis, the guidance is 19%-21% kind of ROA.
Partial answer
Medium priority
Why is credit cost guidance higher than pre-COVID despite mortgage mix being similar?
Asked by Avinash Singh, Emkay Global
Corrected the mix assumption but did not fully address why credit cost remains higher.
corrected mix but did not fully explain higher credit cost
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Question
If there is a kind of in this five years, there's structural shift that, okay, as you go more and more to grow your capital franchises, somewhere there is a kind of you're going down the credit score. What's happening? I mean, despite, I mean, mortgages nearly reaching 30% of your AUM, the credit cost, what was the pre-COVID level, now what you are kind of forecasting, that's on the higher side.
Rajeev Jain, Managing Director
I just want to correct you that on a consolidated basis, even if you look at five years ago, mortgages were 31% of the book, even today it's 31% of the book.