Bajaj Housing Finance Limited has released its financial results for the quarter and half-year ended September 30, 2024, showcasing strong growth in key areas. Here’s an easy-to-read breakdown and analysis of the data from the quarterly results:
Key Financial Highlights for Q2 FY25:
- Assets Under Management (AUM):
- AUM grew by 26%, reaching ₹1,02,569 crore as of September 30, 2024, compared to ₹81,215 crore the previous year.
- This indicates a healthy expansion in their lending portfolio, reflecting higher customer demand for housing finance.
- Net Interest Income (NII):
- NII for Q2 FY25 increased by 13% to ₹713 crore, up from ₹632 crore in Q2 FY24.
- This growth is driven by higher interest income from loans, which surged 25% year-on-year (YoY) to ₹2,227 crore.
- Net Total Income (NTI):
- NTI saw an 18% rise, reaching ₹897 crore from ₹761 crore in Q2 FY24.
- Strong performance in fee and commission income (up 45%) and gains on fair value changes (up 29%) contributed significantly to this growth.
- Operating Efficiency:
- Operating expenses as a percentage of NTI improved to 20.5% in Q2 FY25 from 22.1% in Q2 FY24, showing better cost management.
- Provisions and Loan Losses:
- The company’s provisions for loan losses dropped sharply by 72%, amounting to ₹5 crore in Q2 FY25 versus ₹18 crore in Q2 FY24.
- This suggests improvement in asset quality and lower instances of non-performing assets (NPAs).
- Profit Before Tax (PBT):
- PBT rose 23% YoY, reaching ₹708 crore, compared to ₹575 crore in the same period last year.
- The significant profit boost showcases the company’s strong operational performance and growing financial stability.
- Profit After Tax (PAT):
- PAT for Q2 FY25 was ₹546 crore, marking a 21% YoY increase from ₹451 crore in Q2 FY24.
- This translates to better returns for shareholders and reflects the company’s sustained profitability.
- Asset Quality:
- Gross NPA ratio stood at 0.29% and Net NPA ratio at 0.12%, both slightly higher than the previous year’s figures of 0.24% and 0.09% respectively. However, the company maintained a healthy provision coverage ratio of 58% for NPAs.
- Return on Assets (RoA):
- Annualized return on average assets was 2.5%, slightly down from 2.6% in Q2 FY24, while annualized return on average equity decreased to 13.0% from 16.1%.
- Capital Adequacy:
- The company remains well-capitalized with a capital adequacy ratio of 28.98%, significantly above the regulatory requirement of 15%.
Business Insights:
- Bajaj Housing Finance’s robust growth in AUM and income streams indicates a favorable market demand for housing loans.
- Cost optimization has been a strong focus, with better control over operating expenses while maintaining high profitability.
- The decline in provisions for loan losses is encouraging and suggests stronger asset quality.
- The company’s IPO in September 2024 has bolstered its equity base, ensuring a solid foundation for future growth.
Bajaj Housing Finance continues to deliver solid financial performance, with strong growth in assets, profitability, and operational efficiency. While there’s a slight uptick in NPAs, the overall outlook remains positive, supported by robust capital adequacy and reduced provisioning needs. These results position the company well for future growth in the housing finance sector.
Investors had expected strong results from Bajaj Housing Finance in Q2 FY25, and the company delivered. With Assets Under Management (AUM) crossing ₹1 trillion and profit after tax rising by 21% year-on-year to ₹546 crore, the results aligned with the positive market sentiment. However, some analysts noted a slight dip in return on equity and asset quality compared to last year. Overall, the performance was considered strong, meeting expectations, but not significantly surpassing them(Business News India).
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