Bajaj Finance's revenue trajectory over the past five years has been a masterclass in compounding at scale. Total consolidated income grew from ₹26,385 crore in FY20 to ₹54,984 crore in FY24, translating to a phenomenal 3-year revenue CAGR of 27.8%, with TTM revenue crossing ₹63,800 crore. Even through the crucible of the pandemic—which severely disrupted retail collections in FY21—the company rebounded furiously, adding over ₹1.5 lakh crore in fresh AUM between FY22 and FY24. Growth has been driven by relentless additions to the active customer franchise (adding roughly 3.5 to 4 million new customers per quarter) and a compounding cross-sell strike rate of over 60%.
Margins reflect both pricing power and the natural limits of monetary tightening. Net Interest Margins (NIMs) have historically hovered in the elite 9.5-10.5% band, supported by a rich product mix tilted toward consumer durables and personal loans. However, the FY24-FY25 cycle has witnessed a 40-60 bps NIM compression, driven by rising marginal cost of funds in a 'higher-for-longer' domestic interest rate environment and the mandatory capital allocation hikes imposed by the RBI on unsecured books. Operating leverage, however, remains intact: the cost-to-income ratio has improved from over 38% in FY22 to around 34.0% in FY24, as digital self-servicing and app workflows absorbed incremental transaction volume without linear headcount expansion. Consolidated PAT grew from ₹7,028 crore in FY22 to ₹14,451 crore in FY24, delivering return on equity (ROE) consistently above 21%.
The balance sheet remains a fortress of liquidity. As an NBFC, working capital is its loan book, and liability management is its lifeblood. Capital adequacy (CRAR) stands rock-solid at approximately 22.5% (with Tier 1 well above 21%), supported by a ₹8,800 crore equity raise via QIP and preferential warrant allotment in late 2023. Borrowings are immaculately diversified across commercial paper (8-10%), bank term loans (30-32%), non-convertible debentures (35-40%), and an aggressively expanding public retail deposit book that accounts for nearly 22% of total borrowings. Asset quality remains top-tier: Gross NPA sits at 1.06% and Net NPA at 0.46%, with a conservative Provision Coverage Ratio (PCR) of nearly 57%.
The primary watch item and operational headwind emerged in late 2023 when the RBI directed BFL to temporarily suspend lending under its 'eCOM' and 'Insta EMI Card' products due to non-issuance of Key Fact Statements to borrowers—an embargo that was subsequently lifted in May 2024 after comprehensive compliance overhauls. While financial impact was modest (<1.5% of annual profits), it served as a stark reminder that regulators are scrutinizing rapid digital cross-sell mechanisms with unprecedented vigor.