Bajaj Finance’s Digital Expansion with Airtel
With Airtel’s 375 million subscriber base, Bajaj Finance is strategically focusing on 200 million non-overlapping users who fit its credit and product profiles. As part of this initiative, Bajaj Finance will introduce two pilot financial products on the Airtel Thanks App, with a plan to scale up to nine products by March 2025. This digital expansion is expected to drive significant customer engagement and loan disbursements.
Asset Quality and Financial Performance
For Q3 FY25, Bajaj Finance reported loan losses and provisions of Rs 2,043 crore. Notable changes in asset quality include:
- Net Stage 2 assets increased by Rs 101 crore.
- Net Stage 3 assets rose by Rs 507 crore.
- Gross NPA (GNPA) ratio stood at 1.12%, up from 0.95% in December 2023.
- Net NPA (NNPA) ratio was 0.48%, compared to 0.37% in the previous year.
Despite slightly elevated credit costs (2.1%), the company expects Q4 FY25 to show improvement due to enhanced collection efficiency.
Challenges and Future Outlook
While the partnership and digital expansion present growth opportunities, Motilal Oswal analysts caution that Bajaj Finance's entry into new business segments—such as car loans, tractors, commercial vehicles (CVs), and microfinance (MFI)—could introduce credit risks linked to cyclical market fluctuations.
Additionally, Price-to-Book (P/BV) ratio of 3.4x and a Price-to-Earnings (P/E) ratio of 18x (FY27E). Investors are closely watching the upcoming management transition in April 2025, as CEO Rajeev Jain’s role in the company’s future remains a key factor in stock performance.
Disclaimer -- These article does not provide any recommendation for investment, investors are requested to consult there financial advisor before making any investment.