Bajaj Finance surges over 5% on steady Q2 earnings; profit zooms 13%

Bajaj Finance stock moved northwards in the early morning deals of Wednesday, rising up to 5.22 per cent at Rs 7026.40 per share on the BSE. This came after the company reported a stellar increase in its net profit supported by a one time gain from Bajaj Housing Finance Ltd (BHFL). 

Meanwhile, another arm of the Bajaj Group, Bajaj Finserv shares were also in demand today, surging 2.7 per cent intraday at Rs 1769.85 per share on the BSE. 

Post market hours, on Tuesday Bajaj Finance delivered strong quarterly earnings for the second quarter of the financial year 2024-25 (Q2FY25).  The company reported a consolidated revenue growth of 27.72 per cent year-on-year, reaching Rs 17,095 crore.

 

It also reported a net profit increase of 13 per cent year-on-year, reaching Rs 4,013.7 crore compared to Rs 3,550.8 crore. This included a one time gain of Rs 2,544.11 crore from stake sale in BHFL. 

Net interest income (NII) rose by 22.8 per cent to Rs 8,837.7 crore, up from Rs 7,196.3 crore in the previous year. However, provisions saw a significant rise, increasing by 77.3 per cent year-on-year and 13.3 per cent quarter-on-quarter, totaling Rs 1,909.1 crore.

Further, the company’s assets under management (AUM) grew by 29 per cent to Rs 3.73 trillion as compared to Rs 2.9 trillion in the year-ago period. 

Weak Asset Quality in Q2

Bajaj Finance's asset quality showed weakness in the September quarter compared to the previous year. As of September 30, 2024, the gross non-performing assets (NPA) stood at 1.06 per cent, up from 0.91 per cent on the same date last year. Similarly, net NPA rose to 0.46 per cent, compared to 0.31 per cent a year earlier.

The company reported a capital adequacy ratio (CRAR) of 21.69 per cent as of September 30, 2024, including Tier-II capital, with the Tier-I capital at 20.90 per cent.

Increase in loan Losses

Bajaj Finance reported loan losses and provisions of Rs 1,909 crore for Q2 FY25, a substantial increase of 77 per cent compared to Rs 1,077 crore in Q2 FY24.
 

Despite the rise in provisions, the company experienced growth in its lending activity, with the number of new loans booked rising by 14 per cent year-on-year to 9.69 million, up from 8.53 million in the same quarter last year.

Bajaj Finance share price history

The company’s stock has underperformed the market year to date as it has fallen 4 per cent, while slipping 10.1 per cent in the last one year. In comparison BSE Sensex has risen 11.2 per cent year to date and 24.5 per cent in a year. 

The company has a total market capitalisation of Rs 4.33 trillion . Its shares are trading at a price to earnings multiple of 31.58 times and at an earning per share of Rs 211.42. 

At 10:36 AM, the stock price of the company was up 5.16 per cent at Rs 7021.65 a piece on the BSE. By comparison, the BSE’s Sensex rose 0.13 per cent to 80,325.84 level.