Bajaj Finance has reported a 19% year-on-year increase in net profit, reaching ₹4,546 crore in Q4 FY25, up from ₹3,825 crore in Q4 FY24. The company's net total income (NII) also grew robustly by 23%, coming in at ₹11,917 crore, compared to ₹9,714 crore in the same quarter last year.

The company maintained operational efficiency with operating expenses to net income at 33.1%, slightly better than 34.0% in Q4 FY24. Its pre-provisioning operating profit (PPOP) surged 24% to ₹7,967 crore, reflecting strong business momentum.

On the downside, loan losses and provisions rose to ₹2,329 crore, including an extra ₹359 crore ECL provision tied to model redevelopment. Excluding this, provisions would have been ₹1,970 crore.

Loan losses to average assets under finance were 2.33%, and 1.97% excluding the additional provision.

Profit before tax (PBT) stood at ₹5,647 crore, an 11% rise, but when adjusted for the model-related provision, the underlying growth was 18%.

In a significant tax move, Bajaj Finance reversed prior tax expenses of ₹249 crore and reduced the current year's tax provision by ₹99 crore, resulting in a total tax reduction of ₹348 crore.

Adjusted for these effects, net profit growth for the quarter would be 17%.

Asset Quality & Capital Position

The company’s asset quality remains solid, with Gross NPA at 0.96% and Net NPA at 0.44% as of March 31, 2025. The provisioning coverage ratio on stage 3 assets is a healthy 54%.

The capital adequacy ratio (CRAR) was reported at 21.93%, with Tier-I capital at 21.09%, ensuring a strong capital buffer.

Shareholder Rewards

In line with its commitment to shareholder value, the Board of Directors declared a Special Interim Dividend of ₹12 per share. Additionally, a Final Dividend of ₹44 per share has been recommended.

The Board also approved a bonus issue in the ratio of 4:1 and a stock split in the ratio of 1:2, aimed at improving stock liquidity and retail participation.

4:1 Bonus Issue

A 4:1 bonus means the shareholder will receive 4 additional shares for every 1 share they hold. It's like a reward issued from the company’s reserves — no cost to the shareholder.

So, if you hold:

1 share → you will get 4 bonus shares → total = 5 shares

2 shares → you will get 8 bonus shares → total = 10 shares

5 shares → you will get 20 bonus shares → total = 25 shares

1:2 Stock Split

A 1:2 stock split means each existing share is split into 2 shares — the face value halves, and the number of shares doubles. It improves affordability, especially for retail investors.

So, after the split, your total number of shares will double (without changing the overall value of your holding).

For example, after the 4:1 bonus:

5 shares become 25 shares (due to bonus)

Then each of those 25 shares splits into 2 → total = 50 shares

Final Share Count Summary:

If you originally held:

1 share → becomes 5 (bonus) → becomes 10 (after split)

2 shares → becomes 10 (bonus) → becomes 20 (after split)

5 shares → becomes 25 (bonus) → becomes 50 (after split)

Disclaimer:

The information provided in this blog is for educational and informational purposes only and should not be construed as investment advice. Readers are advised to conduct their own research or consult a qualified financial advisor