Bajaj Finance Q2 Update: AUM Rises Over 29%

Introduction:

Bajaj Finance Ltd. Has mentioned dazzling boom in its property below management (AUM), which surged by way of 29% yr-on-12 months to attain Rs three.Seventy four lakh crore for the region finishing September. This robust performance displays the employer’s resilience and its strategic positioning within the non-banking monetary zone.

Loan Book Growth:

The lender’s loan book expanded by 14% year-on-year, with total loans reaching approximately 9.69 million. This growth indicates a healthy demand for credit and suggests that Bajaj Finance is successfully tapping into the consumer financing market.

Liquidity Position:

Bajaj Finance maintains a strong liquidity position, with a net liquidity surplus of Rs 20,100 crore as of September. Additionally, the company’s deposit base increased by 21% year-on-year, totaling Rs 66,100 crore. This solid deposit growth underlines the company’s ability to attract customer funds, essential for sustaining its lending operations.

Bajaj Finance Q2 Update: AUM Surges 29% Amid Robust Growth:

First Quarter Recap:

In the first quarter of FY2025, Bajaj Finance demonstrated notable financial performance:

Net Interest Income: Rose by 25% to Rs 8,365 crore.

Total Revenue: Increased by 28.8% to Rs 16,098 crore.

Other Income: Showed a remarkable rise of 97.8% to Rs 3.64 crore.

However, the company faced challenges with loan losses and provisions, which jumped 70% to Rs 1,685 crore due to lower collection efficiencies. The net loan loss to average assets under finance stood at 1.99%, projected to stabilize between 1.75% and 1.8% for the financial year.

Market Performance:

Despite these encouraging figures, Bajaj Finance’s stock has faced volatility, experiencing a decline of up to 4.18% on the NSE during the reporting period. It ultimately closed down 3.49%, reflecting broader market trends. Over the past year, shares have decreased by 6.70%, though they have seen a slight uptick of 1.85% year-to-date.

Analyst Insights:

Out of 35 analysts monitoring Bajaj Finance, a significant majority—25—maintain a ‘buy’ rating, indicating strong confidence in the company’s growth potential. The average 12-month price target suggests an upside of 8.9%, pointing towards optimism among market participants regarding future performance.

Conclusion

Bajaj Finance’s latest quarterly update underscores its robust growth trajectory, characterized by significant increases in AUM and loan book size, coupled with a solid liquidity position. While challenges related to loan losses remain a concern, the overall outlook appears positive, with strong analyst support and growth potential in the consumer finance sector.

Investors will be keenly watching the company’s strategies to enhance collection efficiencies and maintain growth momentum in the upcoming quarters.

FAQ:

1. What is the latest AUM reported by Bajaj Finance?
Bajaj Finance’s assets under management (AUM) rose by 29% year-on-year to Rs 3.74 lakh crore for the quarter ended September.

2. How much did the loan book grow in Q2?
The loan book grew by 14% year-on-year, reaching approximately 9.69 million loans in the second quarter.

3. What is Bajaj Finance’s current liquidity position?
As of September, Bajaj Finance reported a net liquidity surplus of Rs 20,100 crore.

4. How have the company’s deposits performed?
The deposits book grew by 21% year-on-year, totaling Rs 66,100 crore.

5. What were the key financial metrics in the first quarter of FY2025?
In Q1 FY2025, net interest income rose by 25% to Rs 8,365 crore, and total revenue from operations increased by 28.8% to Rs 16,098 crore.

6. How did loan losses and provisions change?
Loan losses and provisions surged 70% to Rs 1,685 crore in Q1, attributed to lower collection efficiencies.

7. What is the current net loan loss ratio?
The net loan loss to average assets under finance stood at 1.99% in Q1, with projections for FY2025 estimated between 1.75% and 1.8%.

8. How did Bajaj Finance’s stock perform recently?
The stock experienced a decline of up to 4.18% during the reporting period but closed down 3.49%. It has fallen by 6.70% over the last 12 months but is up 1.85% year-to-date.

9. What do analysts say about Bajaj Finance’s stock?
Of the 35 analysts covering the stock, 25 recommend a ‘buy,’ while 5 suggest ‘hold’ and 5 recommend ‘sell.’ The average 12-month price target indicates an upside of 8.9%.

10. What should investors watch for in the future?
Investors should monitor Bajaj Finance’s strategies to improve collection efficiencies, manage loan losses, and sustain growth momentum in the consumer finance market.

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