Bajaj Finance is poised to report strong financial results for the second quarter of FY25, driven by robust loan growth and improved asset quality. Analysts predict double-digit growth in Net Interest Income (NII) and profit for the quarter ended September.
According to estimates, Bajaj Finance’s NII is expected to grow 22-25% year-over-year, driven by strong loan growth and an improvement in net interest margins. The company’s loan portfolio has been expanding rapidly, with a projected growth rate of 25-30% YoY.
Profit after tax is also anticipated to witness double-digit growth, ranging between 20-25% YoY. This growth will be fueled by the company’s expanding loan book, improved asset quality, and higher fees and commission income.
The launch of its initial public offering (IPO) financing business is expected to contribute significantly to Bajaj Finance’s growth trajectory. The company’s decision to divest its stake in its life insurance arm will also aid in improving its capital adequacy ratio.
ICICI Securities predicts Bajaj Finance’s NII to increase 24% YoY to Rs 6,523 crore, while profit after tax is expected to rise 22% YoY to Rs 2,454 crore. Motilal Oswal estimates NII growth of 23% YoY to Rs 6,440 crore and a 21% YoY increase in profit after tax to Rs 2,384 crore.
Emkay Global Financial Services expects Bajaj Finance’s loan growth to remain robust, driven by strong demand in the consumer and SME segments. The brokerage firm anticipates NII growth of 25% YoY to Rs 6,630 crore and a 24% YoY increase in profit after tax to Rs 2,533 crore.
Bajaj Finance’s management has guided for a 25% YoY growth in loans and a 20-22% YoY increase in NII for FY25. The company’s asset quality is expected to improve, with a reduction in gross non-performing assets.
Overall, analysts remain optimistic about Bajaj Finance’s growth prospects, driven by its strong loan growth, improving asset quality, and diversification into new business segments.
The company’s Q2FY25 results will be closely watched by investors, as it is expected to provide guidance on its growth trajectory and asset quality for the remainder of the fiscal year.
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