- 24 Jul 2024
- ICICI Securities
Bajaj Finance's reported mixed performance in Q1FY25
News: Bajaj Finance's reported mixed performance in Q1FY25 with continued growth in balance sheet, though asset quality witnessed some hiccups. AUM came healthy at 31% YoY to ₹3,54,192 crore, driven by ~1.1 crore new loans, reflecting a 10% YoY increase. Customer base expanded by 44.7 lakhs, taking total to 8.8 crore. While NII increased by 25% to ₹8,365 crore, despite 23 bps decline in margins (13 bps impact due to increase in CoF and 10 bps led by change in AUM mix). Higher credit cost at ₹1790 crore, kept PAT growth slower at 14% YoY to ₹3,912 crore. GNPA and NNPA ratios stood steady at 0.86% and 0.38%, respectively.
Views: While growth remained healthy, some concerns remained on asset quality. Management expects loan losses to remain elevated in Q2 before normalizing from Q3. Net loan loss to average AUM is projected to be around 1.75%-1.85% for FY25E.
Impact: Neutral