Bajaj Finance Q2FY25 results: Consolidated net up 13% at Rs 4,014 crore

While NII grows 23%, loan loss provisions up 77%

Non-banking finance company Bajaj Finance reported 13 per cent year-on-year growth in its consolidated net profit to Rs 4,014 crore in the July-September quarter (Q2Fy25), helped by healthy growth in net interest income (NII).

NII for consolidated books expanded by 23 per cent year-on-year (Y-o-Y) to Rs 8,838 crore, up from Rs 7,196 crore in the same period of the previous year (Q2Fy24).

It was a mixed quarter. Good quarter on volumes, AUM & operating efficiencies. Loan losses remained elevated in Q2. As a result, profit growth and Return On Assets (ROA) were muted, Bajaj Finance said in an analyst presentation filed with BSE.

Bajaj Finance stock closed 1.58 per cent lower at Rs 6,677.40 per share on the BSE. Its capital adequacy ratio (CAR) stood at 21.69 per cent with Tier I of 20.90 per cent as of September 30, 2024.

Bajaj Finance in a statement said net loan losses and provisions for Q2FY25 were Rs 1,909 crore, up from Rs 1,077 crore in Q2FY24. Loan losses and provisions remained elevated in Q2. This increase was across all retail and SME lines of businesses. Company continues to take risk actions by cutting segments and pruning exposures, it added.

In Q2FY25, the cost of funds (COF) stood at 7.97 per cent, an increase of three basis points (bps) over the April-June quarter (Q1Fy25). The company estimates that COF has peaked as of Q2 and net interest margin has stabilised in Q2Fy25, Bajaj Finance said in an analyst presentation.

The company in a statement said its fees and commission income rose nine per cent year-on-year to Rs 1,426 crore in Q1 FY25.

Its assets under management (AUM) grew by 29 per cent to Rs 3.73 trillion as of September 30, 2024, from Rs 2.9 trillion as of September 30, 2023. New lines of businesses have started contributing 2-3 per cent of AUM growth, it said.

The company clocked the quarterly AUM growth of Rs 19,732 crore in Q2 FY25. New loans booked were up 14 per cent to 9.69 million in Q2, compared with 8.53 million in Q2 FY24.

The deposit book grew by 21 per cent year-on-year and stood at Rs 66,131 crore as of September 30, 2024. Deposits contributed to 20 per cent of consolidated borrowings as of September 30, 2024.