Why Bajaj Finance Shares Dipped Nearly 1% After Q2 Print

Shares of Bajaj Finance fell on Wednesday after the firm’s second-quarter results missed analyst estimates.

What Happened: Bajaj Finance posted a consolidated net profit of ₹3,551 crore for the second quarter, a 28% increase from the previous year but slightly short of analysts’ predictions, who expected a 30% rise to ₹3,626 crore on average.

Under The Hood: The profit surge was primarily due to improved net interest income, an increase in new loans disbursed, and enhanced asset quality. During the quarter, Bajaj Finance approved 85.3 lakh loans, marking a 26% increase from the 67.6 lakh loans issued last year.

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Its consolidated net interest income for the quarter also rose 26% to ₹8,845 crore.

However, Bajaj Finance experienced a 14 basis points decline in net interest margins, primarily due to an increase in the cost of funds. The company’s cost of funds rose to 7.67% in the quarter, up by 6 basis points from the first quarter.

While the asset quality improved, the company had to set aside more funds for loan losses and provisions, which reached ₹1,077 crore in the quarter, compared with ₹734 crore in the corresponding period of the previous year.

In addition to these financials, Bajaj Finance’s deposits increased 39% to reach ₹54,800 crore, while its assets under management jumped 33% to ₹2.9 lakh crore.

Price Action: Bajaj Finance’s share price was down 0.9% at ₹8,020.10 at the start of trade on Wednesday.

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