Bajaj Finance Ltd reported a robust financial performance for the January-March 2025 quarter, showcasing a 17.12% year-on-year rise in consolidated net profit. The company's profit reached Rs 4,479.57 crore, up from Rs 3,824.53 crore in the same period last year. This significant growth in profit was accompanied by a 23.65% increase in revenue from operations, which soared to Rs 16,359.14 crore compared to Rs 13,230.07 crore in the previous year.
However, the company's total expenses also surged by 30.52%, amounting to Rs 12,830.18 crore, indicating a rise in operational costs. Despite this, Bajaj Finance's assets under management (AUM) grew by an impressive 26%, reaching Rs 4,16,661 crore as of March 31, 2025, up from Rs 3,30,615 crore a year earlier. In the fourth quarter alone, AUM increased by Rs 18,618 crore.
Net interest income (NII) also saw a healthy increase of 22%, rising to Rs 9,807 crore from Rs 8,013 crore in the same quarter of the previous year. However, the company faced higher loan losses and provisions, which totaled Rs 2,329 crore in Q4 FY25, compared to Rs 1,310 crore in Q4 FY24. This included an additional provision of Rs 359 crore related to the redevelopment of its expected credit loss (ECL) model, bringing the adjusted loan losses and provisions to Rs 1,970 crore.
In light of its strong financial performance, Bajaj Finance's Board of Directors has recommended a final dividend of Rs 44 per equity share for FY25, up from Rs 36 per equity share the previous year. This reflects a 2200% payout ratio based on the face value of Rs 2 per share. Furthermore, the company announced plans for a stock split and the issuance of bonus shares. The board has approved, pending shareholder approval, the sub-division of the face value of shares from Rs 2 to Re 1 and the issuance of four fully paid bonus equity shares for every one fully paid equity share.
Earlier in the day, Bajaj Finance shares traded lower, closing at Rs 9,089.30 after shedding 0.03% in value. This decline came as investors awaited the company’s quarterly earnings announcement. The shares initially opened at Rs 9,149.70 but fell as much as 1.44% during trading, hitting a low of Rs 8,960.80.
Market analysts had anticipated a strong earnings performance for Bajaj Finance, citing healthy loan growth, stable credit costs, and improved asset quality. Predictions indicated that net profit would rise by 18.1% to Rs 4,518 crore, while NII was expected to grow by 23% to Rs 9,814 crore. Despite the anticipated profit growth, the company's margin was projected to contract slightly by 5 basis points to 9.65%, with credit costs expected to decline by 5 basis points to 2.05%.
Bajaj Finance's stock has shown remarkable resilience, rallying over 21% year-to-date and increasing by 30% over the past year. Notably, the stock has delivered multibagger returns of 113% over the last five years. Analysts have expressed optimism about the stock's future performance, suggesting that it has recently broken out of a four-year consolidation phase and may continue to rise.
Ruchit Jain, Vice President of Equity Technical Research at Motilal Oswal Financial Services Ltd, noted that the overall trend for Bajaj Finance shares remains positive. He highlighted that the stock has strong support around the ₹8,600 - 8,700 levels, with potential targets of ₹9,600 - 9,700. Jain encouraged traders to adopt a 'buy on dips' strategy, viewing any drop in the share price as a buying opportunity.
In addition to the financial results, Bajaj Finance will hold a conference call at 6:30 p.m. on April 29 to discuss the earnings and other pertinent matters with investors. Key figures from the company, including Vice Chairman Rajeev Jain and Managing Director Anup Saha, will participate in the call.
As Bajaj Finance continues to navigate the competitive landscape of the non-banking financial sector, its latest quarterly results and strategic decisions regarding dividends and share splits signal a commitment to rewarding shareholders while maintaining a focus on growth and stability in the financial market.
