Shares of Bajaj Finance Ltd. rose more than 2 percent on April 4, following the release of a robust quarterly business update that highlighted strong growth across all major operating metrics for the fourth quarter of FY25. The non-banking financial company (NBFC) reported a 26 percent year-on-year (YoY) rise in Assets Under Management (AUM), alongside a 36 percent increase in fresh loan disbursements, underscoring its sustained retail credit momentum despite regulatory scrutiny.
The stock, which had been under pressure over the past four sessions after touching a 52-week high of Rs 9,260 on March 25, saw a reversal in sentiment after the announcement. The broader rally in the stock helped it outperform the Nifty Financial Services Index on a day when global markets were roiled by the escalating US-China tariff war.
Q4FY25 Business Update: Strong Credit Growth and Customer Acquisition
As per its regulatory filing, Bajaj Finance’s AUM stood at Rs 4.17 lakh crore as of March 31, 2025, a sharp increase from Rs 3.31 lakh crore a year earlier, showcasing the company’s continued ability to capture retail credit demand across product segments including consumer durables, personal loans, and SME finance.
The company disbursed 1.07 crore loans during Q4FY25, up 36 percent YoY, a signal of robust demand across urban and semi-urban markets. In terms of customer base, Bajaj Finance reported a 22 percent YoY increase, taking its customer franchise to 10.18 crore, reflecting a wide and deepening distribution network.
Deposits — an increasingly important source of funding for NBFCs — grew 19 percent YoY to Rs 71,400 crore, bolstering liquidity and indicating higher customer stickiness amid rising interest rate volatility.
Highlights:
AUM as of Mar 31, 2025: Rs 4.17 lakh crore (up 26% YoY)
Loans disbursed in Q4FY25: 1.07 crore (up 36% YoY)
Customer base: 10.18 crore (up 22% YoY)
Deposits: Rs 71,400 crore (up 19% YoY)
Regulatory Discomfort: RBI Flags Lapses in Co-branded Credit Cards
Despite the positive operational performance, the NBFC is under the Reserve Bank of India’s (RBI) scanner over its co-branded credit card operations. According to a CNBC Awaaz report, Bajaj Finance received a ‘letter of displeasure’ from the central bank highlighting compliance gaps in internal control mechanisms, particularly in customer risk disclosures and product transparency in its partnership card offerings.
This comes at a time when the RBI has adopted a stricter stance on digital and retail lending operations, with a focus on customer-centric practices, risk management, and responsible lending. While no financial penalties were imposed, the development raises concerns about enhanced supervision and the potential impact on future product rollouts in the cards and digital payments space.
Highlights:
RBI issued a letter of displeasure over lapses in co-branded credit cards
Concerns include customer risk exposure and internal process inadequacies
No financial penalty imposed but indicates heightened regulatory scrutiny
Sector Context: Q4 Seasonality Absent, Asset Quality Trend Under Lens
According to analysts at Motilal Oswal Financial Services, the March quarter is traditionally strong for NBFCs due to seasonal disbursals and improved collections. However, Q4FY25 did not follow this pattern, with many lenders — including Bajaj Finance — seeing muted seasonality and cautious demand in some segments. This indicates that the broader NBFC sector may be entering a more normalized phase, requiring sharper focus on credit quality and liability management.
While asset quality commentary from Bajaj Finance is yet to be released, market participants are closely watching delinquency trends and credit cost movement, especially in the unsecured loan segment which saw heightened regulator attention in late 2024.
Highlights:
Traditional Q4 seasonality in NBFC sector was missing in FY25
Credit demand steady but not exuberant; collections trend soft
Asset quality improvement not yet clearly visible across the board
Deposit Traction, Loan Expansion to Drive Earnings Resilience
Analysts believe Bajaj Finance remains well-positioned to weather both regulatory and macroeconomic challenges, owing to its large customer base, multi-product distribution, and diversified funding mix. While the RBI’s intervention may temporarily slow expansion in its cards business, its core lending and deposit franchises remain strong.
With the AUM growth far outpacing peers, and loan originations hitting record levels, expectations for a solid earnings performance in Q4 results remain high. The stock, which has gained 26 percent year-to-date, may continue to see support from long-term investors provided compliance concerns are addressed proactively.
Highlights:
Operational momentum expected to reflect in Q4 earnings
Strong deposit growth to aid liquidity, margin stability
Regulatory compliance enhancements will be crucial for sentiment and valuation trajectory
