Bajaj Finance Shares Crash 5% After Q1 Results 2025 — Buy or Hold?

Bajaj Finance opened with a downside gap on the NSE and plunged to an intraday low of Rs.900, slipping more than 5% from Thursday’s close of Rs.958.95. This fall came as a surprise, especially after the company reported robust Q1 results.

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Bajaj Finance Q1 FY2025: Strong Growth in Profit and AUM

In Q1 2025, Bajaj Finance posted a consolidated net profit of Rs.4,765 crore, up 22% year-on-year. The non-banking finance giant also reported a 25% YoY rise in Assets Under Management (AUM), touching Rs.4.42 lakh crore. Net Interest Income (NII) grew to Rs.10,227 crore, reflecting a 22% jump.

New Loans Surge, Customer Base Expands

Bajaj Finance disbursed 13.49 million new loans in Q1 FY25, showing a 23% YoY rise. Its customer base also expanded 21% to 106.51 million, with strong performance across mortgage, urban consumer lending, and MSME segments.

Rising NPAs and Decline in Two-Wheeler Loans Raise Concerns

Despite the growth, asset quality emerged as a red flag. Gross and Net NPAs rose to 1.03% and 0.50%, respectively. Provisions also increased by 26% to Rs.2,120 crore. A notable 20% decline was seen in the two- and three-wheeler loan portfolio, while MSMEs showed early stress.

Cost of Funds Eases; Deposit Strategy Under Review

Bajaj Finance reported a 20 basis point drop in the cost of funds to 7.79%, with future guidance set between 7.60%–7.65%. Deposits grew 15% YoY to Rs.72,109 crore, though the company is reassessing its deposit dependency.

Subsidiaries Show Strong Profit Growth

Group companies Bajaj Housing Finance and Bajaj Financial Securities reported 21% and 37% profit growth respectively, signaling strong and diversified performance across business verticals.

Expert Advice: Hold or Buy the Dip?

Experts like Sumeet Bagadia suggest holding Bajaj Finance with a stop loss at Rs.870. For new investors, the current dip may be a buying opportunity, with an expected short-term target between Rs.950 and Rs.960.

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