Bajaj Finance's Net Interest Income (NII) for Q2FY25 increased by 22.8% YoY to INR 88,377 million due to strong growth in Assets Under Management (AUM).
The Pre-Provision Operating Profit (PPOP) also rose by 25.2% YoY to INR 73,071 million, in line with expectations.
However, the profit after tax grew by 13.0% YoY to INR 40,137 million, slightly below expectations due to higher provisions of INR 19,091 million.
Despite this, Bajaj Finance remains positive about its long-term prospects, driven by investments in new business lines and operational efficiencies through technology, including GenAI.
Analysts have revised their profit after tax estimates for FY25E and FY26E downwards by 2.9% and 2.0% respectively, anticipating higher credit costs.
The target price for Bajaj Finance shares has been revised to INR 8,066, up from the previous INR 7,945, based on a P/ABV multiple of 4.6x on the FY26E adjusted book value of INR 1,753.4.
The firm maintains a "BUY" rating on the stock, indicating confidence in its growth trajectory.