Bajaj Housing Finance Q2 FY25 Results: Asset quality remains stable, Net NPA and Gross NPA increase marginally

Bajaj Housing Finance Limited (BHFL) reported steady asset quality in its unaudited financial results for Q2 FY25, with gross non-performing assets (GNPA) at 0.29% and net non-performing assets (Net NPA) at 0.12%, compared to 0.28% and 0.11% in the previous quarter. The provisioning coverage ratio on Stage 3 assets stood robust at 58%, demonstrating the company’s focus on maintaining a healthy loan book.

Financial Performance Highlights:

• Assets Under Management (AUM): BHFL’s AUM increased by 26% year-on-year (YoY) to ₹1,02,569 crore as of September 30, 2024, from ₹81,215 crore in the same period last year, reflecting the company’s growth in loan disbursements.
• Net Interest Income (NII): NII grew by 13% YoY, reaching ₹713 crore, compared to ₹632 crore in Q2 FY24. The rise in NII was driven by higher loan growth and a strong interest spread.
• Total Income: The company’s total income for Q2 FY25 was ₹2,227 crore, a 25% increase from ₹1,782 crore in Q2 FY24. Interest expenses, however, rose 32% YoY to ₹1,514 crore, driven by a larger loan portfolio.
• Net Profit: Profit after tax for the quarter rose by 21% YoY to ₹546 crore, compared to ₹451 crore in the same quarter last year, attributed to efficient cost management and higher operating profit.
• Operating Expenses: BHFL’s operating expenses as a percentage of net total income stood at 20.5%, up from 22.1% in Q2 FY24, showing improved efficiency in cost management.

Loan Growth and Asset Mix:

BHFL’s loan book expanded by 27% YoY to ₹89,878 crore, demonstrating strong demand in the housing finance and mortgage sectors. The company also reported a 45% rise in fees and commission income to ₹45 crore, further supporting revenue growth.

Capital Adequacy and Return Ratios:

• Capital Adequacy: The capital adequacy ratio, including Tier I capital, stood at 28.98% as of September 30, 2024, well above the regulatory requirement.
• Return on Assets (ROA): The annualized ROA for Q2 FY25 was 2.5%, marginally lower than the 2.6% reported in Q2 FY24.
• Return on Equity (ROE): The annualized ROE stood at 13.0%, compared to 16.1% in the corresponding quarter last year, due to higher equity base and increased loan provisions.