Bajaj Finance Q4 Results Review - AUM Growth To Remain Robust At 26-28% In FY25E: ICICI Securities

ICICI Securities Report

Bajaj Finance Ltd.’s Q4 FY24 financial performance was mixed as assets under management growth, new customer acquisition, asset quality and operating efficiencies continued to trend as envisaged; continued stress in rural B2C and 21 bps QoQ net interest margin contraction were dampeners.

While management maintained its AUM growth guidance at 26-28% in FY25E, likely NIM compression in H1 FY25E and revised credit cost to 1.85% versus 1.7% pre-Covid is likely to keep earnings under pressure during H1 FY25E.

However, management sounded confident about sustaining return on asset/return on equity at ~4.7%/~20% in FY25E.

Bajaj’s resilient business model, built on strong customer acquisition engines and cross-sell, augurs well for the business to maintain leadership in the NBFC space.

We retain Buy; target price unchanged at Rs 8,500, valuing the standalone business at five times FY26E book per share and Rs 830 towards housing subs.

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