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BFSI companies reported mixed performance

ICICIdirect Research 02 May 2025 DISCLAIMER

Bajaj Finance reported mixed performance in Q4FY25 with healthy balance sheet growth, though asset quality saw mild pressure. AUM rose 26% YoY to ₹4,16,661 crore, driven by ~1.07 crore new loans, a 36% YoY rise. The customer base increased by 47 lakh during the quarter, taking the total to 10.18 crore.

NII grew 22% YoY to ₹9,807 crore, despite 25 bps margin compression due to a 3 bps rise in cost of funds and a 22 bps impact from AUM mix change. Credit cost remained elevated at ₹2,329 crore, including ₹359 crore of additional ECL provisioning. As a result, PAT grew by 19% YoY to ₹4,546 crore.

GNPA and NNPA rose slightly to 0.96% and 0.44%, respectively. Credit cost appears to have peaked in Q4FY25. After three quarters of elevated provisions amid tightening of under-writing norms, management now expects credit costs to stabilize at ~1.85–1.95% in FY26E.

Continued robust AUM growth (24-25%), steady margins and operational efficiency (30-40 bps) is expected to keep RoA (calculated) at 4-4.2%. Long term business strategy remains unchanged with signs of stabilization in credit cost providing some conviction on incremental trends. Given growth at ~25% CAGR and RoA at 4% plus, we continue to remain positive on the stock.

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