Bajaj Finance Q2 Results Preview: Net profit may jump 33%, NII seen up 24% YoY led by strong loan growth

Bajaj Finance Q2 Results Preview: Bajaj Finance Ltd, the non-banking finance company, is set to report its earnings for the second quarter of FY25 on October 22. Bajaj Finance Q2 results are likely to be strong with sharp net profit growth and the company is also expected to benefit from the stake sale in its subsidiary Bajaj Housing Finance through its initial public offering (IPO).

Bajaj Finance is expected to report net interest income of ₹8,925 crore in the quarter ended September 2024, registering a growth of 24% from ₹7,197 crore in the year-ago period, according to a poll of five brokerages by Livemint.

The company’s net profit in Q2FY25 is estimated to rise nearly 33% to ₹4,710 crore from ₹3,550.80 crore, year-on-year (YoY). Estimates also show Pre-Provisions Operating Profit (PPOP) during the quarter to grow over 24% to ₹7,273 crore from ₹5,834.70 crore, YoY.

A rise in cost of funds is expected to lead to a compression in Bajaj Finance’s margin in Q2. Brokerage firm Kotak Institutional Equities estimates net interest margin (NIM) to contract by around 50 bps YoY to 9.8%. Credit costs are likely to be at 2.0% for Q2FY25.

Analysts expect Bajaj Finance to report healthy Asset under Management (AUM) growth of 30% YoY.

“Margins compression is likely to be slower despite the increase in CoF, and the C-I Ratio to remain steady. Credit costs are to be contained within management guidance and Asset quality is expected to remain stable QoQ. We expect earnings to be supported by gains from stake sale,” Axis Securities said.

Going ahead, Bajaj Finance’s management commentaries on NIM trajectory, credit costs and sustenance of growth momentum are the key monitorables.

Bajaj Finance Stock Price

Bajaj Finance share price has given negative returns this year as the stock has fallen over 10% in one month and more than 7% year-to-date (YTD). In the past 12-month period, Bajaj Finance stock price has declined over 12%.

Volumes traded on stock exchanges of Bajaj Finance shares on Monday saw a sharp spike ahead of the Q2 results announcement. Around 20 lakh Bajaj Finance shares changed hands on BSE and NSE combined on October 21 as compared with its one week average volumes of 9 lakh shares.

At 3:05 PM, Bajaj Finance shares were trading 1.76% lower at ₹6,776.00 apiece on the BSE. 

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