Bajaj Finance’s consolidated net profit for Q4 rose 21 per cent year-on-year to ₹3,825 crore. The consolidated results include the financials of wholly-owned subsidiaries Bajaj Housing Finance and Bajaj Financial Securities and of associate companies Snapwork Technologies and Pennant Technologies.

“A good quarter on AUM, customer acquisition, portfolio metrics and operating efficiencies. Dampener for the quarter were elevated loan losses in rural B2C and continued impact of regulatory restrictions,” the company said in the investor presentation.

Loan losses and provisions for the quarter grew 53 per cent to ₹1,310 crore as the rural B2C business continued to witness elevated loan losses. AUM growth of rural B2C--excluding gold loans--has been brought down from 25 per cent in Q4 FY23 to 6 per cent in Q4 FY24, the NBFC said, adding that it remains “watchful on risk actions” in this portfolio.

Gross NPA ratio improved to 0.85 per cent from 0.94 per cent a year ago. The net NPA ratio at 0.37 per cent was worse than 0.34 per cent in the previous year. The NBFC held management and macro-economic overlay of ₹300 crore as of March 31.

Growth metrics

The number of new loans booked during the quarter grew 4 per cent y-o-y to 78.7 lakh. New loans booked were lower by about 8 lakh due to the RBI restrictions on sanction and disbursal of loans under ‘eCOM’ and ‘lnsta EMI Card’.

Total AUM grew 34 per cent to ₹3.3-lakh crore. Net interest income (NII) for the quarter was up 28 per cent at ₹8,013 crore. NIM fell 21 bps sequentially, primarily due to AUM composition changes.

“The company has made required changes in response to the regulatory restriction imposed by RBI and has formally requested RBI for a review and removal of these restrictions,” it said, adding that in order to “ensure compliance in form and spirit” the company has, in addition to digital lending products, implemented KFS (Key Fact Statement) for all lending products effective March 31 in 20 vernacular languages.

Customer franchise grew by 32.3 lakh in Q4 taking the total to 836.4 lakh customers as of March 31, higher by 21 per cent y-o-y .

The NBFC’s deposits grew 35 per cent y-o-y to ₹60,151 crore, comprising 21 per cent of consolidated borrowings as of March 2024. Cost of funds for the quarter rose 10 bps sequentially to 7.86 per cent. The company had a liquidity buffer of ₹15,668 crore as at the end of FY24.

FY25 outlook

After adding record 1.45 crore customers in FY24, Bajaj Finance said it remains confident of adding another 1.2-1.4 crore customers in FY25. It pegged AUM growth for the current financial year at 26-28 per cent, expected to be supported by newly launched secured businesses such as LAP, new car financing and tractor finance.

The NBFC said it expects cost of funds to peak by July-August and shift in AUM composition towards secured assets to stabilise by September 2024. Accordingly, NIM is expected to moderate by another 30-40 bps over the next two quarters.

It guided for return on assets (RoA) in the long-term guidance corridor of 4.6-4.8 per cent, but said that return on equity (RoE) might remain lower than the long-term guidance due to ₹9,097 crore of additional capital raised in Q3 FY24.

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