Bajaj Finance Q2 Results Preview: Bajaj Finance Ltd, the non-banking financial company, will report its earnings for Q2FY25 on October 22. Bajaj Finance’s second quarter results are likely to be strong with strong net profit growth and the company is also expected to benefit from the sale of stake 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 same period last year, according to a survey of five brokerages by Livemint.
The company’s net profit in Q2FY25 is estimated to rise by almost 33% to $4,710 crores $3,550.80 crore, year-on-year (YoY). Estimates also show that pre-provision operating profit (PPOP) during the quarter will grow more than 24% to $7,273 crores $5,834.70 crore, YoY.
An increase in cost of funds is expected to lead to margin compression for Bajaj Finance in the second quarter. Brokerage firm Kotak Institutional Equities estimates that the net interest margin (NIM) will contract by around 50 basis points year-on-year to 9.8%. Credit costs are likely to be at 2.0% for Q2FY25.
Analysts expect Bajaj Finance to report healthy assets under management (AUM) growth of 30% YoY.
“Margin compression is likely to be slower despite the CoF increase and the CI ratio is likely to remain stable. Credit costs should be contained within management guidelines and asset quality is expected to remain stable quarter-on-quarter. We expect the earnings to be supported by gains from stake sales,” Axis Securities said.
Looking ahead, Bajaj Finance management’s comments on NIM trajectory, credit costs and maintaining growth momentum are the key elements to monitor.
Bajaj Finance share price
The Bajaj Finance share price has given negative returns this year as the stock has fallen more than 10% in a month and more than 7% year-to-date (YTD). In the last 12-month period, the Bajaj Finance share price has fallen by more than 12%.
Trading volumes on the stock exchanges of Bajaj Finance shares on Monday saw a sharp rise ahead of the announcement of Q2 results. Around 20 lakh shares of Bajaj Finance changed hands on BSE and NSE combined on October 21 as compared to their average one-week volumes of 9 lakh shares.
At 3:05 pm, Bajaj Finance shares were trading 1.76% lower on $6,776.00 each in the BSE.
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