Bajaj Finance Q2 Result Update: Profit of ₹4,000 Crore, GNPA Rises to 1.06% Amid Revenue Growth

Bajaj Finance has unveiled its Q2 results for the fiscal year 2024-25 on October 22, 2024. The company reported a net profit of ₹4,000 crore, marking a 13% increase from ₹3,551 crore in the same quarter last year. However, this figure fell short of market expectations, which had predicted a profit of around ₹4,343 crore. The revenue from operations surged by 28%, reaching ₹17,090 crore, compared to ₹13,382 crore in the previous year.

Key Financial Highlights

• Net Profit: ₹4,000 crore (up 13% YoY)
• Revenue from Operations: ₹17,090 crore (up 28% YoY)
• Net Interest Income: Increased by 23% to ₹8,838 crore
• Customer Franchise: Grew to 92.09 million, a 20% increase YoY
• Loan Losses and Provisions: Increased by 77% YoY to ₹1,909 crore
• Gross Non-Performing Asset (GNPA) Ratio: Rose to 1.06% from 0.91% a year earlier

Performance Overview

Bajaj Finance’s performance in Q2 FY25 reflects a mixed picture. While the company achieved significant growth in revenue and net profit, it also faced challenges with rising loan losses. The increase in GNPA indicates that some segments are under stress, particularly unsecured loans.

The company’s asset under management (AUM) grew by 29%, reaching ₹3,73,924 crore as of September 30, 2024. This growth was bolstered by the addition of approximately 9.69 million new loans, up from 8.53 million in the same quarter last year. The deposits book also saw a healthy increase of 21%, totaling ₹66,131 crore.

Market Reaction

Following the announcement of its Q2 results, Bajaj Finance shares experienced volatility. On October 22, the stock fell by about 2%, closing at ₹6,645.75 per share. Analysts noted that while the company’s fundamentals remain strong, concerns about elevated loan losses could impact investor sentiment.

Management Insights

The management team at Bajaj Finance acknowledged the challenges posed by rising loan losses but expressed confidence in the company’s overall strategy and growth trajectory. They emphasized that demand for consumer credit remains robust despite the pressures on certain segments.

Future Outlook

Looking ahead, Bajaj Finance plans to focus on improving asset quality while continuing to expand its customer base and product offerings. The company is also expected to utilize remaining funds from its recent IPO to bolster its financial position and drive future growth.