How does Bajaj Financial's recent performance compare with other NBFCs

Bajaj Finance Limited (BFL) has demonstrated a strong and resilient performance compared to other NBFCs in India, marked by robust growth, asset quality, and operational efficiency. Here are the key points highlighting how Bajaj Finance's recent performance compares with its peers:

• Growth and Market Position: Bajaj Finance continues to lead the NBFC sector with significant revenue growth, reporting a compound annual growth rate (CAGR) of about 19.5% over the last five years, driven by diverse segments like mortgages, SME loans, and rural financing. It boasts a market capitalization of approximately ₹4.3 lakh crore, positioning it as one of the largest and most valuable NBFCs in India. This outpaces newer players like Jio Financial Services, which despite a high valuation, has yet to start earning core revenues.

• Profitability and Margins: BFL maintains high operating margins (around 69% operating margin reported in recent quarters) and has consistently grown its profit after tax (PAT), showing a 20.1% year-on-year increase in recent periods. Its asset under management (AUM) expanded by 25% year-on-year, reflecting strong loan book growth and market demand.

• Asset Quality: Bajaj Finance exhibits superior asset quality with gross non-performing assets (NPA) around 1.03% and net NPA near 0.5%, significantly better than many NBFC peers. Among comparable companies such as HDB Financial Services and Shriram Finance, Bajaj Finance has one of the lowest net NPA ratios (~0.1%), indicating very strong credit discipline and risk management.

• Capital Adequacy and Financial Strength: Bajaj Finance's capital adequacy ratio stands at a healthy ~22.5%, supporting growth with a solid Tier-1 capital base. Its balance sheet is robust and well-capitalized compared to peers, aiding sustained lending and absorption of market shocks.

• Operational Efficiency and Customer Reach: The company has scaled operations through investments in technology, digital transformation, and wide distribution, catering to over 106 million customers. Its product diversification (46 variants across 22 product lines) and customer-centric strategies contribute to operational resilience and superior market penetration.

• Valuation and Market Performance: Bajaj Finance has sustained strong stock market performance, delivering a 30%+ annual return over the last year, outperforming sector benchmarks despite short-term stock price volatility due to market pressures. It trades at a premium price-to-book ratio (~8.2x), reflecting strong investor confidence relative to many NBFCs and financial institution.

• Peer Comparisons: Compared to significant NBFCs like HDB Financial Services and Shriram Finance, Bajaj Finance leads in return on equity (19.1% vs. peers), operating profit margins, asset quality, and market capitalization. While Shriram Finance is recognized for higher dividend growth, Bajaj Finance balances consistent dividend payout with higher growth and market presence

In summary, Bajaj Finance stands out among Indian NBFCs for its robust revenue and profit growth, exemplary asset quality, strong capitalization, and widespread customer base. It combines scale, operational excellence, and innovation, outperforming many peers in financial metrics and market valuation, making it a benchmark NBFC in India’s financial services sector.

If you want, I can provide a specific comparison table or more details on particular financial ratios versus other NBFCs.