Bajaj Finance Ltd Q4 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Chintan Joshi - - Analyst : Hey, good evening. I wanted to start with Panel 24. Thank you for Panel 23 and 24. It's great to see that you are constantly judging yourselves against what you expect. If I could go into a little bit more detail for FY '26 starting with AUM and then following on into NIM. On AUM, if you give us a refresh of where do you think growth will be easier to find and where growth will be challenging to find over FY '26, that would be helpful. And on NIM, quick data keeping, what is the exact NIM, reported NIM for the current quarter? And why should we not expect some NIM expansion with falling rates, that's what we would typically expect of you. What's different this time around? Thank you.

Question: Chintan Joshi - - Analyst : Are you saying that you're going a little conservative on the cost of funds? Are you saying you're being a little conservative out here? Or is this fair?

Question: Chintan Joshi - - Analyst : And the reported NIM number?

Question: Chintan Joshi - - Analyst : And the reported NIM number?

Question: Abhishek Murarka - HSBC Securities & Capital Markets - Analyst : Hello, am I audible?

Question: Abhishek Murarka - HSBC Securities & Capital Markets - Analyst : Hi Rajeev, hi everyone. So my question is on this ECL model refresh. What kind of history do you take? Do you take 5 years - 6 years? And why has there been additional provision. So is it that FY '21 or '22, which were -- or '20 and '21, which were higher credit costs, those have got added. And next year's refresh will probably see some exclusion there. So if you can give some sense, that will be useful?

Question: Abhishek Murarka - HSBC Securities & Capital Markets - Analyst : Right. So basically, for Stage 1 and Stage 2, you have taken so -- especially Stage 1, you have taken a shorter period. So last three quarters impact is what is getting projected forward, If I have to understand it.

Question: Abhishek Murarka - HSBC Securities & Capital Markets - Analyst : Okay. Understood. And if I back calculate your write-off works out to around INR1,700 crore. Is that correct for the quarter? Ballpark?

Question: Abhishek Murarka - HSBC Securities & Capital Markets - Analyst : Okay, INR2,100. Okay. All right. And just finally, some commentary on growth in rural B2C and some of the -- yes, basically rural B2C how do you see that. I think in the 2Q call, you had said that things go fine for the next couple of quarters, then that portfolio could probably grow at 20% - 25% in FY '26. So do you see that kind of outlook now? And are you comfortable in that segment going forward?

Question: Abhishek Murarka - HSBC Securities & Capital Markets - Analyst : Sure, thanks so much, Rajeev, Anup and Sandeep for taking that. And I'd also like to congratulate Manish, Sidhanth and Rajeev for their appointment as deputy CEOs. So congratulations and thanks a lot for taking my questions.

Question: Kunal Shah - Citi india - Analyst : Yeah. The question on growth, particularly 24% to 25-odd %. It seems like some change in stance till last time we were pretty confident of achieving the long-term guidance of 25% plus. So no doubt, I think you indicated in terms of customer franchise, new businesses, but then why, particularly like 24%, 25% growth for the next year, which are the segments where you expect some kind of a pullback on the growth side?

Question: Abhishek Murarka - HSBC Securities & Capital Markets - Analyst : Okay. Got it. And if I can ask one more question.

Question: Kunal Shah - Citi india - Analyst : Yeah. So when you -- so when you give the credit cost guidance of 1.85% to 1.95%, you still believe it is relatively higher to grow at more than 25-odd percent? Or is it like the pool in Stage 2, which has got increased in this quarter, that's something which is worrying you in terms of particular rise in seasonally strong Q4. Is that the reason?

Question: Kunal Shah - Citi india - Analyst : Got it. Okay, thanks, that clarifies and all the best, yeah.

Question: Viral Shah - IIFL Securities - Analyst : Hello.

Question: Viral Shah - IIFL Securities - Analyst : Yeah, thank you for the opportunity. Rajeev, just two questions. I would say, one, when I look at the asset quality panels on the Page 69 onwards, right, In all the panels, the amber side remains where it is in the previous quarter. And when I see, say, the Stage 2 and the stage 3, that has been kind of still inching up. So basically, what gives us this confidence that say, next year, it's going to be much better. Apart from the fact that maybe there may be some ECL release, as you mentioned, towards the end of the year. Is there the early trends that you are seeing? If you can give some bit more color on that?

Question: Viral Shah - IIFL Securities - Analyst : Got it, very clear. Sandeep, one more for you. So when you say that the NIMs are going to be kind of stable, you highlighted the point that the exit quarter NIMs were materially lower, and on a Y-o-Y basis, when I look at next year, we will also have the hit from the Bajaj Housing kind of portfolio

Question: Viral Shah - IIFL Securities - Analyst : And just a clarification, the rate -- the cost of fund benefit that you are guiding for, you're assuming what 75 basis points of rate cuts or 100 basis points?

Question: Viral Shah - IIFL Securities - Analyst : Got it. Makes sense. Thank you very much for taking all my questions and all the best.

Question: Kuntal Shah - Oaklane Capital - Analyst : Can you hear me?

Question: Kuntal Shah - Oaklane Capital - Analyst : But any plan to use this excess capital. Any plans to use this excess capital?

Question: Kuntal Shah - Oaklane Capital - Analyst : Thank you.

Question: Kuntal Shah - Oaklane Capital - Analyst : Thank you and all the best.

Question: Avinash Singh - Emkay Global - Analyst : Thanks for the opportunity. Just again, going back to the credit cost on guidance, that is 1.85% to 1.95%, slightly higher than what you had initially guided for FY '25. Considering the fact if I look versus pre-COVID, I mean, you have a material composition coming from BHFL or mortgage that kind of very local EBIT cost. So if there is kind of in this five years, the structural shift that would be as you go more and more to grow your customer franchisees somewhere there is a kind of you're going down the credit growth what's happening here? I mean, despite, I mean, mortgages nearly reaching 30% of your AUM, the credit cost, what was the pre-COVID level is now what you was kind of forecasting that's on the higher side. So adjusted for that industry for the -- it's probably materially higher. So what is explaining sort of that for you.

Question: Avinash Singh - Emkay Global - Analyst : Okay, thank you.

Question: Subramanian Iyer - Morgan Stanley - Analyst : Thank you Rajiv, Anup, Sandeep and Bajaj Finance team. Rajiv, Anup do you want to make any closing comments? .