- Bajaj Housing Finance Limited (BHFL) Reports Strong Growth in Q4 FY25
- Key Financial Numbers
- Business Mix and Loan Disbursements
- Funding and Costs – Bajaj Housing Finance
- Margins and Interest Spreads
- Strong Loan Quality
- Digital and Strategic Moves – Bajaj Housing Finance
- People and Collections
- Segment Highlights – Bajaj Housing Finance
- Regulatory and Industry Context – Bajaj Housing Finance
- What the Management Said
- Other Key Updates – Bajaj Housing Finance
- FAQs about Bajaj Housing Finance Limited (BHFL)
Bajaj Housing Finance Limited (BHFL) Reports Strong Growth in Q4 FY25
Bajaj Housing Finance Limited (BHFL) has ended the financial year on a strong note. The company reported healthy growth across its loan book, profits, and disbursements in Q4 FY25. It also maintained solid asset quality and kept costs under control.
Let’s break down the key highlights from their Q4 FY25 earnings update.
Key Financial Numbers
AUM Growth
BHFL’s Assets Under Management (AUM) reached ₹1,14,684 crore as of 31 March 2025. This marks a 26% increase from the same time last year. In Q4 alone, BHFL added ₹6,370 crore to its loan book, compared to ₹5,442 crore in Q4 FY24.
Profit and Returns
The company’s net profit for Q4 FY25 was ₹587 crore. That’s a 54% rise from the previous year. For the full year, profit went up by 25%. Return on Assets (ROA) stood at 2.4% annualized, while Return on Equity (ROE) was 12.1% for the quarter and 13.4% for the full year.
Loan Quality
BHFL continued to keep its loans clean. Gross Non-Performing Assets (GNPA) were at just 0.29%. Net NPA (NNPA) came down slightly to 0.11% from 0.13% last quarter. Credit costs remained low at 0.12% in Q4 FY25, and only 0.09% for the full year.
Operating Efficiency
Operating expenses as a percentage of net total income dropped to 21.7% in Q4 FY25 from 27.1% a year ago. For the full year, it improved to 20.8%, compared to 24% in FY24.
Capital Position
The Capital Adequacy Ratio (CAR) was strong at around 28.25%. The Public Borrowing Cap (PBC) ratio was at 63.28%, well above the 60% minimum required. BHFL’s net worth stood at ₹19,932 crore.
Network Expansion
BHFL operates from 174 locations and has 216 branches across India.
Business Mix and Loan Disbursements
Growth by Product
BHFL saw solid growth across all product segments:
| Product | YoY Growth |
|---|---|
| Home Loans | 22% |
| Loan Against Property (LAP) | 28% |
| Lease Rental Discounting (LRD) | 24% |
| Developer Finance | 49% |
Loan Portfolio Breakdown (as of March 2025)
| Segment | Share of Portfolio |
|---|---|
| Home Loans | 56.2% |
| LAP | 10.7% |
| LRD | 19.1% |
| Developer Finance | 12.5% |
Disbursements
BHFL disbursed ₹14,254 crore in Q4 FY25, which is 25% higher than the same quarter last year.
Affordable Housing and Near Prime Loans
A new division focused on affordable and near-prime housing was launched recently. It is growing as expected and is helping expand BHFL’s customer base.
Funding and Costs – Bajaj Housing Finance
Cost of Funds
The average cost of funds stayed flat at 7.9% compared to the previous quarter.
Borrowing Mix
BHFL uses a balanced approach for funding:
- 49% from money market instruments
- 41% from bank loans
- 10% from National Housing Bank (NHB) refinance
The company has increased its use of Non-Convertible Debentures (NCDs), which now make up 45% of total borrowings—up from 35% last year. Bank borrowings stand at around ₹34,000 crore, with nearly a quarter linked to MCLR rates.
Risk Management
To manage interest rate risk, BHFL hedged around ₹2,300 crore in fixed-rate bonds. It also uses loan assignments and long-tenor bonds for Asset-Liability Management (ALM).
Home loans typically have a maturity of 6-7 years, while developer finance loans are usually under 2 years.
Margins and Interest Spreads
Changes in Yield
The average yield on BHFL’s loan portfolio dropped slightly to 9.7% in Q4 FY25. This is a 10 basis point drop from Q3 and 20 bps lower than last year.
- Gross spread declined to 1.8% from 1.9% in Q3.
- Net Interest Margin (NIM) remained stable at 4%.
Why Margins Fell
Management said the drop in yield was due to intense competition in the market. They have passed on 50 bps of repo rate cuts to repo-linked loans and 10-15 bps to others.
They expect NIMs may shrink by 10-15 bps in FY26. However, the plan is to balance it out by growing in higher-yielding segments like affordable housing.
Strong Loan Quality
BHFL continues to maintain high asset quality:
- Stage 1 Assets (performing well): 99.39% of the loan book
- Stage 2 Assets (watch list): 0.32%, down from 0.37% last quarter
NPA by Product
| Product | GNPA (%) | Change |
|---|---|---|
| Home Loan | 0.34% | +1 bps |
| LAP | 0.65% | -11 bps |
| LRD | 0.00% | No change |
| Developer Finance | 0.05% | -4 bps |
The company expects to keep credit costs steady in the 20-25 basis points range.
Digital and Strategic Moves – Bajaj Housing Finance
Tech-Driven Processes
BHFL has increased the use of digital platforms:
- 93% of new customers now sign agreements electronically
- 80% of new accounts in March were opened online
Leadership and Expansion
The company has strengthened its leadership team to support growth. It also bought about ₹4,000 crore worth of loan portfolios in FY25 through assignment-in transactions.
At the same time, it earned ₹46 crore from loan assignment-outs in Q4 and plans to keep doing 12-15% assignment-outs going forward.
People and Collections
Employee Count
- Full-time (on-roll) staff: 1,977
- Total workforce (including contractual): 4,811
Collection Efforts
BHFL has about 250 staff focused on collections. The company said it doesn’t need a large collection team because of its good customer quality and low delinquencies.
Segment Highlights – Bajaj Housing Finance
Developer Finance
This segment grew by 49% year-on-year. There are no major concerns in project additions or loan conversions.
Affordable Housing and Near Prime Loans
These segments are seeing organic growth. They offer better returns too—about 180 bps more than prime home loans.
Loan Sourcing from Developers
Roughly 15-20% of BHFL’s home loan customers come from real estate developers the company has financed.
Regulatory and Industry Context – Bajaj Housing Finance
Repo Rate Outlook
If repo rates fall by 75 bps in FY26, BHFL expects a 34-35 bps reduction in its cost of funds.
Exit Penalty Rule
The RBI’s rule on home loan exit penalties is not expected to have a big impact on BHFL directly. However, it might lead to more borrowers transferring their loans (BT-out).
Public Shareholding Norm
To meet the regulatory minimum of 25% public shareholding, BHFL plans a secondary share sale. There’s no plan for a new equity issue in FY26.
What the Management Said
Profit Growth
The company said that the slower profit growth this year is due to a strong base from last year. It sees this as normal and not a cause for concern.
Outlook for FY26
BHFL is confident it can manage any pressure on margins by focusing on:
- Better loan mix
- Continued cost control
- Keeping loan quality high
There is no change in medium-term targets. The company remains focused on profitable growth.
Other Key Updates – Bajaj Housing Finance
- Loan assignment-outs and long-term bonds are being used actively for ALM.
- Affordable and near-prime loans yield about 180 bps more than standard home loans.
FAQs about Bajaj Housing Finance Limited (BHFL)
What is the AUM of BHFL as of March 2025?
It is ₹1,14,684 crore, up 26% from last year.
How much profit did BHFL make in Q4 FY25?
BHFL posted a net profit of ₹587 crore in Q4 FY25.
What is BHFL’s asset quality?
Very strong. GNPA is just 0.29% and NNPA is 0.11%.
What are the key focus areas for growth?
Affordable housing, near-prime customers, and digital onboarding are main focus areas.
Will margins be under pressure?
Yes, but BHFL plans to manage it through asset mix and better yields.
Bajaj Housing Finance Limited (BHFL) closed FY25 with strong results. Its loan book and profits are growing fast. Asset quality remains excellent, and operating costs are coming down. Even with some pressure on interest spreads, the company is confident about the future.
BHFL’s push into affordable housing and its smart use of digital tools give it a solid edge. With no big risks on the horizon, BHFL looks well placed for another good year ahead.
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