Bajaj Finance Q3 Results: Rise In Provisions Caps Net-Profit Growth At 17%
The net interest income rose 23% to Rs 9,382 crore in the third quarter.
Bajaj Finance Ltd.'s consolidated net profit rose 17% in the quarter ended December, meeting analysts' estimates.
The company posted a bottom line of Rs 4,246 crore in the third quarter, according to an exchange filing on Wednesday. Analysts tracked by Bloomberg had pegged the profit at Rs 4,200 crore.
Higher net interest income lifted the bank's net profit, but it was capped by the rise in provisions and bad loans.
Bajaj Finance Q3 FY25 Highlights (Consolidated, YoY)
Profit up 17% to Rs 4,246.5 crore versus Rs 3,639 crore (Bloomberg estimate: Rs 4,200 crore).
Net interest income up 23% to Rs 9,382 crore versus 7,655 crore.
Asset under management up 28% to Rs 3.98 lakh crore versus 3.1 lakh crore.
Provisions up 64% to Rs 2,043 crore versus Rs 1,248 crore.
Gross NPA at 1.12% versus 1.06% (QoQ).
Net NPA at 0.48% versus 0.46% (QoQ).
Asset quality worsened, with the gross non-performing assets ratio rising to 1.12% at the end of December as against 1.06% a quarter ago. The net NPA ratio also rose to 0.48% compared with 0.46% in the prior quarter. Provisioning coverage ratio as of Dec. 31 was 57%.
Given the current macroeconomic environment, Managing Director Rajeev Jain said the non-bank lender would like to grow its balance sheet on a consolidated basis by 25% on year and maintain credit costs at below 2% and deliver a 20–25% of profit growth in the next financial year.
Bajaj Finance also laid out its long-term guidance by pegging the AUM growth of 25–27% and profit growth of 23–24%.
It expects the gross NPA ratio in the range of 1.2–1.4% and a net NPA ratio in the corridor of 0.4–0.5%. Return on assets is seen at 4.6–4.8% and return on equities at 21–23%.
On a consolidated basis, the AUM of car loans recorded a 97% YoY growth to Rs 11,141 crore, followed by gold loans at 81% to Rs 7,267 crore.
In terms of outstanding numbers, mortgages contributed the most to the overall AUM to Rs 1.22 lakh crore, up 26% YoY, and urban business-to-consumer loans grew 35% YoY to Rs 83,143 crore. The SME lending was up 31% YoY to Rs 46,943 crore and two and three-wheeler finance declined 2% to Rs 18,972 crore. Rural B2C loans grew 16% to Rs 20,135 crore.
During October-December, deposits of the non-bank lender rose 19% to Rs 68,797 crore. The margin of the non-bank lender stabilised at the end of the quarter.
