Bajaj Finance Q4 Results: Profit Up 20% On Higher Other Income

Bajaj Finance Ltd.'s net profit rose in the fourth quarter of fiscal 2024, and it met analysts' estimates.

The company's standalone bottom line increased 20% year-on-year to Rs 3,402 crore for the quarter-ended March, according to an exchange filing on Thursday. Analysts polled by Bloomberg had pegged a net profit of Rs 3,546 crore.

Bajaj Finance Q4 FY24 Results Key Highlights (Standalone)

• Net profit up 20% at Rs 3,402 crore vs Rs 2,837 crore (YoY).

• Total income rises 31% to Rs 12,764 crore vs Rs 9,719 crore (YoY).

• Gross NPA stage 3 at 1.05%.

• Net NPA stage 3 at 0.46%.

Bajaj Finance's net interest income surged 29% in Q4 to Rs 7,340 crore, as compared with the same period last year. The total revenue from operations increased 31.3% to Rs 12,760 crore in the quarter-ended March, from the corresponding period a year ago.

Other income for the lender rose 107% to Rs 3.94 crore.

Pre-provisioning operating profit soared 26% year-on-year to Rs 5,844 crore, as compared with Rs 4,633 crore.

The non-bank financer's assets under management grew 35% on a yearly basis to Rs 2.44 lakh crore, from Rs 1.80 lakh crore a year ago.

For FY25, the company expects AUM growth of 26-28%, according to the Q4 FY24 investor presentation.

In the quarter, the new loans booked were 7.8 million, up 4% year-on-year. Rajeev Jain, MD of Bajaj Finance, said in a post-earnings analyst call that the loan book was down on account of restrictions placed by Reserve Bank of India, on the sanction and disbursal of loans under 'eCOM' and Insta EMI Card.

The company has formally requested the regulator for review and removal of restrictions, he said.

The management expects net interest margin to moderate 30-40 bps over the next two quarters. This is because it had been moderating throughout FY24, due to increase in cost of funds and gradual shift in composition towards secured assets.

The cost of funds continue to inch-up and grew by 10 bps sequentially, Jain said.

Like previous quarters, Jain said that the rural B2C segment continues to be a challenge even in Q4. It is still seeing a slowdown in growth, even though the risk is contained as the portfolio is 6% of the balance sheet.

"We continue to be watchful in rural B2C business," he added. Hence, it also expects credit costs to be elevated in FY25 as the business is yet to come back to pre-Covid levels.

The company's loan losses and provisions for Q4 was at Rs 1,278 crore as against Rs 803 crore in the same period a year ago. It also holds a management and macroeconomic overlay of Rs 206 crore, as of March 31, 2024, according to its press release.

The interest income was up 35% year-on-year to Rs 11,201 crore.

The company also appointed Tarun Bajaj as an Independent Director for a period of five years, with effect from Aug. 1, according to an exchange filing after the Q4 earnings.

The appointment comes after Bajaj Finance, in the previous quarter, rejigged key management portfolios. Back then, it appointed Anup Saha as Deputy MD and Deepak Bagati, Sandeep Jain and Anurag Chottani as Chief Operating Officers.

Responding to queries on management transition, Jain said that it is happening smoothly and the company would update everyone in due course.

According to Q4FY24 investor presentation, the board of Bajaj Housing Finance Ltd. has incorporated a committee to undertake various actions for the company's mandatory listing.

NDTV Profit previously reported that BHFL was preparing for an IPO worth $1 billion and the discussions are still in early stages.

In addition, Jain also replied to analysts' queries on the account aggregator business, and said that the company is excited for it.

"...it dramatically opens up new paths for growth for any company... ONDC, while (it) has no commercial outcome, will dramatically improve engagement rate," Jain said.