In This Article:
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Assets Under Management (AUM) Growth: INR19,732 crore increase in the quarter; consolidated AUM at INR374,000 crore.
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New Loans Booked: 9.7 million, up 14% from last year.
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Customer Franchise: Added 5 million customers; total customer base at 92.1 million.
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Liquidity Buffer: INR20,200 crore.
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Cost of Funds: 7.97%, a sequential increase of 3 basis points.
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Deposits Growth: 21%, totaling INR66,131 crore.
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Net Interest Income (NII): Grew by 23% to INR8,838 crore.
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Net Total Income: Increased by 24%.
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Operating Expenses to Net Total Income: Improved to 33.2% from 34% last year.
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Credit Costs: Gross loan loss and provisions at INR1,934 crore; net loan losses at INR1,910 crore.
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Gross NPA: 1.06%; Net NPA at 0.46%.
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Profit Before Tax (PBT): Grew 14% to INR5,401 crore.
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Profit After Tax (PAT): Increased by 13% to INR4,014 crore.
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Return on Equity (ROE): 19.1%.
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Return on Assets (ROA): Just below 4.5%.
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Employee Headcount: 59,400, with 4,007 staff added in Q2.
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Annualized Attrition Rate: 16.4%.
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International Borrowing Rating: Moody's assigned Baa3/P long-term rating.
Release Date: October 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Bajaj Finserv Ltd (BOM:532978) reported a strong AUM growth of 29% year-on-year, reaching INR 374,000 crore.
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The company added nearly 4 million new customers in Q2, bringing the total customer base to 92.1 million.
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Net interest income grew by 23% to INR 8,838 crore, with overall net total income increasing by 24%.
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The company maintained a strong liquidity buffer of INR 20,200 crore, with a cost of funds at 7.97%, indicating financial stability.
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Bajaj Finserv Ltd (BOM:532978) received an investment-grade rating from Moody's, aligning with its sovereign rating, which enhances its credit profile.
Negative Points
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Loan losses remained elevated, with gross loan loss and provisions at INR 1,934 crore, impacting profitability.
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The net loan loss to average assets is expected to be higher than initially projected, between 2% and 2.05% for FY25.
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The company's deposit growth was slower than expected at 21%, due to a competitive pricing environment.
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Credit costs were a dampener for the quarter, with a net increase in Stage 2 and Stage 3 assets of INR 542 crore.
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The rural B2C and SME lending segments were highlighted as areas of concern, with elevated GNPA levels leading to cautious growth strategies.
Q & A Highlights
Q: Could you give us more color on what gives you confidence that slippages and credit costs may have peaked? Also, where might NIMs go over the next year with a potential rate cut? A: Rajeev Jain, Managing Director, explained that bounce rates are still lower, and portfolio quality is holding, with flow rates being higher. Investments in debt management and underwriting actions give confidence that credit costs will improve by Q4. Sandeep Jain, CFO, noted that a 25 basis point drop in repo rate could lead to a 10-12 basis point NIM improvement, which will be used to grow secured and new business lines.