Bajaj Finance Reports 21% Growth in Q4 FY24 Profit, Beats Estimates

Bajaj Finance, India's largest non-banking lender, reported a 21% year-on-year growth in its consolidated profit after tax to Rs 3,825 crore in the fourth quarter of the financial year 2023-24, compared to Rs 3,158 crore in the year-ago period. The net profit growth was driven by a rise in assets under management (AUM), net interest income, and improvement in asset quality.

The company's consolidated net interest income (NII) grew 28% YoY to Rs 8,013 crore in Q4 FY24, surpassing analysts' expectations. Bajaj Finance's AUM grew by 34% to Rs 3.31 lakh crore as of March 31, 2024, from Rs 2.47 lakh crore a year ago. The company's gross non-performing assets (NPAs) decreased to 0.85% and net NPAs remained unchanged at 0.37%.

Why this matters: Bajaj Finance's strong Q4 results demonstrate the resilience of India's non-banking financial sector despite regulatory challenges and economic headwinds. The company's performance sets a positive tone for the broader financial industry and reinforces investor confidence in the sector's growth prospects.

However, the company faced regulatory restrictions from the Reserve Bank of India (RBI) on the sanction and disbursal of loans under its 'eCOM' and 'Insta EMI Card' lending products, which resulted in a lower number of new loans booked during the quarter. Bajaj Finance has formally requested the RBI for a review and removal of these restrictions.

For the full fiscal year, Bajaj Finance reported a net profit of Rs 14,451 crore, up 26% year-on-year, and declared a final dividend of Rs 36 per equity share for FY24. The company's subsidiaries, Bajaj Housing Finance and Bajaj Financial Securities, also reported growth in their Q4 profits.

"The company saw good performance in terms of AUM, customer acquisition, portfolio metrics, and operating efficiencies, but faced elevated loan losses in the rural B2C business and continued impact of regulatory restrictions," Bajaj Finance said in a statement. The company remains confident of adding 1.2-1.4 crore customers in FY25 and expects AUM growth of 26-28%, supported by newly launched secured businesses.

Key Takeaways

• Bajaj Finance Q4 FY24 net profit up 21% YoY to Rs 3,825 crore.
• NII grew 28% YoY to Rs 8,013 crore, beating analyst expectations.
• AUM grew 34% to Rs 3.31 lakh crore, with improved asset quality.
• Faced regulatory restrictions on 'eCOM' and 'Insta EMI Card' lending products.
• Full-year net profit up 26% YoY to Rs 14,451 crore, declared Rs 36 dividend.