Bajaj Finance Q4 Results: Dividend Declared; Net Profit Jumped 21% to Rs 3,824 Crore

Bajaj Finance, a leading Non-Banking Financial Company (NBFC) in India, recently released its Quarter-4 FY-24 results. While the report indicates a financially strong quarter with a 21% YoY jump in net profit, there are underlying factors causing a mixed reaction from investors and analysts.

Highlights of Bajaj Finance's Q4FY24 Performance

Bajaj Finance reported a robust performance in FY24. Net profit jumped 21% to Rs 3,824 crore, while revenue from operations saw a healthy increase of 31.34%. The company's customer base also expanded significantly by 21% to reach 8.36 crore as of March 31, 2024. Bajaj Finance maintained a strong financial position with low gross NPA (Non-Performing Assets) and net NPA at 0.85% and 0.37%, respectively. Further demonstrating their commitment to shareholders, the company declared a final dividend of Rs 36 per share for FY24.

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Market Reaction

Despite the positive financial performance, Bajaj Finance's share price witnessed a 7% drop after the announcement. This decline can be explained by a few key factors. First, growth in new loans, while positive at 4%, missed expectations due to recent regulatory restrictions. Second, the company's own guidance for future growth in areas like assets under management fell short of analyst forecasts. Finally, concerns raised by analysts about potentially higher credit costs in the coming period added to investor worries.

Analyst Views and Future Outlook

Analysts presented mixed views on Bajaj Finance's prospects. Some analysts, like Motilal Oswal, downgraded the stock to "neutral" due to concerns about lower-than-expected growth. Others, like UBS, maintained a "sell" rating due to worries about credit costs and product mix. However, some analysts like Macquarie see the potential for a rebound if the RBI lifts the loan product bans. Emkay also remains bullish with a "buy" rating, although they acknowledge a short-term slowdown in profitability.

Conclusion

The future outlook for Bajaj Finance hinges on several factors, including the RBI's decision regarding the loan product bans and the company's ability to navigate the potential increase in credit costs. Bajaj Finance's Q4FY24 results showcase a financially strong company with a loyal customer base. However, regulatory hurdles and growth moderation have caused some investor concerns. The company's future performance will be depended on its ability to address the challenges and maintain its healthy financial position.

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