Bajaj Finance Limited · NSE:BAJFINANCE
Bajaj Finance — Investor Presentation (December 2024)
41 slides from Bajaj Finance's investor presentation, Dec 10, 2024
Slide 1: Regulation 30 intimation: submission of analyst group meet presentation
10 December 2024 THE MANAGER, THE MANAGER, BSE LIMITED LISTING DEPARTMENT DCS - CRD NATIONAL STOCK EXCHANGE OF INDIA PHIROZE JEEJEEBHOY TOWERS LTD. EXCHANGE PLAZA, C-1. BLOCK G, DALAL STREET, BANDRA - KURLA COMPLEX, BANDRA MUMBAI - 400 001 (EAST) MUMBAI - 400 051 SCRIP CODE: 500034 SCRIP CODE: BAJFI
Slide 2: Bajaj Finance Limited
BAJAJ FINANCE LIMITED Rajeev Jain Managing Director 10 December 2024
Slide 3: Welcome and presentation format
Good afternoon. Welcome once again. I will present for 45 minutes and take Q&A for 15 minutes. 2
Slide 4: 17-year journey
17-year journey FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 X times #Products lines 4 6 8 12 12 15 16 16 17 19 20 21 21 22 22 22 26 #Locations 116 87 79 79 82 91 184 393 590 856 1,332 1,830 2,392 2,988 3,504 3,733 4,145 36x #Loans (MM) 1.0 0.6 0.9 1.6 2.2 2.8
Slide 5: 17-year journey: growth in products, customers and AUM
17-year journey FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 X times #Products lines 4 6 8 12 12 15 16 16 17 19 20 21 21 22 22 22 26 #Locations 116 87 79 79 82 91 184 393 590 856 1,332 1,830 2,392 2,988 3,504 3,733 4,145 36x It’s been a great run so far. In la
Slide 6: FY25 ambition of doubling AUM to 4 lakh crore
In FY22 AGM, as our AUM crossed ₹ 2 lakh crore, I presented our ambition of doubling AUM from ₹ 2 lakh crore to 4 lakh crore by FY25 with similar return ratios. I am happy to share that we are well on course to disburse over 40 MM loans, cross 100 MM franchise and 4 lakh Cr AUM in FY25 with a health
Slide 7: Where do we go from here?
Question is, where do we go from here? 6
Slide 8: LRS framework defines medium-term aspirations
We rely on our LRS framework to define our medium-term aspirations. LRS: Long-Range Strategy 7
Slide 9: LRS is a 5-year rolling strategy framework
LRS is a 14-year old process in BFL. It is a 5-year rolling strategy framework with a 12-24 month execution roadmap and a bottoms- up financial plan. We analyse macro trends, industry outlook and benchmark a successful company every year as part of the process. We just concluded our LRS 2025-29 last
Slide 10: LRS framework has six sections
Our LRS Framework has 6 sections namely, 1. 1 Macro Trends, 2. 3 Benchmarking 2 Financial sector & Key Industries forecast, 3. company of the year, 4. 4 Megatrends, 5. 5 Basic Construct and 6. 6 Strategy. Given paucity of time, I will only cover Megatrends, Basic Construct and Strategy sections to g
Slide 11: Reviewing progress on LRS 2024-28
Our tradition is, ‘do as we say, say as we do’. So, before I unveil LRS 2025-29, let’s quickly review our progress update on strategies and megatrends identified in LRS 2024-28. We had outlined 35 key strategies and 25 megatrends in LRS 2024-28. 10
Slide 12: Update on 35 strategies of LRS 2024-28
Update on 35 strategies of LRS 2024-28 Product (9) Horizontal (15) Platforms (7) Geography (2) Subsidiaries (2) (4) (5) (14) (1) (6) (1) (2) (2) Assured Zero Liquidity Consumer App All products in all Commercial Zero Identity 12-15% of retail Buyback on New Know everyone Drag locations Vehicle Misma
Slide 13: 28 of 35 strategies are green
Update on 35 strategies of LRS 2024-28 Product (9) Horizontal (15) Platforms (7) Geography (2) Subsidiaries (2) (4) (5) (14) (1) (6) (1) (2) (2) Assured Zero Liquidity Consumer App All products in all Commercial Zero Identity 12-15% of retail Buyback on New Know everyone Drag locations Vehicle Misma
Slide 14: Megatrends update
Megatrends update Technology (9) Products Generative AI 30 Cr+ Cost Save (8) Insurance for All Cyber Security WIP 6 Projects live Credit on UPI Digital Fraud Awareness campaigns WIP done Blockchain Plastic as form factor WIP 40MM Insurance – Live Banking – by Mar’25 Platforms Future of Device Augmen
Slide 15: Good progress on 18 megatrends
Megatrends update Technology (9) Products Generative AI 30 Cr+ Cost Save (8) Good progress on 18 Megatrends Insurance forand All 7 are WIP Cyberwork Security in progress. 2 6 Projects live megatrends where significant efforts have Credit on UPI been Digital Fraud made in FY25 Awareness campaigns are
Slide 16: LRS 2025-29: Megatrends
Let’s now discuss LRS 2025-29. I will start with Megatrends… 15
Slide 17: What are megatrends
Just to refresh, what are Megatrends Megatrends are powerful, transformative forces that could change the economy, business and society. They are structural shifts that are longer term in nature and generally have irreversible consequences for businesses. They can change the status quo of a business
Slide 18: Megatrends
Megatrends Technology (11) Multi Cloud Zero Trust Products (9) Green Finance Generative AI to AI Insurance for All Cyber Security Credit on UPI Digital Fraud Plastic as form factor Blockchain Future of Device Augmented reality Platforms (4) Social as a Platform Pre-owned Data privacy India Stack (3)
Slide 19: Three new megatrends take total to 28
Megatrends Technology (11) Multi Cloud Zero Trust Products (9) Green Finance Generative AI to AI Insurance for All Cyber Security 3 new Megatrends - Green Finance, Multi-cloud & Zero Trust Credit on UPI Digital Fraud taking the total to 28. Also, we think GenAI has transitioned to Plastic as form fa
Slide 20: 3 new megatrends: definition and plan
3 new Megatrends - definition and plan Megatrends Definition LRS Plan India's green initiatives target net- Start with financing of solar and EV zero emissions by 2070, 45% products to retail and MSME 1 Green Finance emission reduction by 2045, customers in Q4 FY25. Targeting creating a ₹ 35 lakh Cr
Slide 21: BFL's Basic Construct
Let me now talk about BFL’s Basic Construct… 20
Slide 22: Basic construct organized into 8 elements
Basic construct is principally organized as 1. 1 Ambition, 2. 2 Strategy, 3. 3 Approach, 4.4 Philosophy, 5.5 Market share, 6. 6 Profit Share, 7. 7 Customer Share and 8.Technology 8 and AI-first. Let’s go through these 8 elements quickly… 21
Slide 23: BFL business construct (1/3)
BFL business construct (1/3) To be a leading financial services company and a viable 1 payments player in India. Dominate with 200 MM consumers, Ambition market share of 3-4% of total credit, 4-5% of retail credit and (Updated) 1% of payments GMV To be an omnipresent financial services company domin
Slide 24: BFL business construct (2/3)
BFL business construct (2/3) 4 To build businesses with a 10-year view anchored on prudence Philosophy and risk management to deliver ‘through the cycle’ 21–23% (No change) shareholder returns 5 Every business of the company to be amongst top 5 players in Market share India in each line of business
Slide 25: BFL business construct (3/3)
BFL business construct (3/3) 7 To grow our share of customer’s wallet by offering all products Customer and services in a frictionless manner and deliver highest Share Customer Satisfaction (CSAT) Score and Products Per Customer (No change) (PPC) Technology and AI-first as an organization culture to
Slide 26: End of basic construct section
I have come to the end of basic construct section. It remains an important governing frame and guides our strategic decisions. Continuous sharpening of our basic construct helps us strengthen our moat as a Company… 25
Slide 27: Introducing BFL 3.0 - A FINAI Company
Time for LRS 2025-29. Introducing, BFL 3.0 – A FINAI Company. Before I talk about BFL 3.0, let me take you through BFL 1.0 and BFL 2.0 journey… 26
Slide 28: BFL 1.0 (2008-16) and BFL 2.0 (2017-24)
2008-16 was BFL 1.0 and 2017-24 was BFL 2.0 BFL 1.0 – AUM grew from ₹ 2,478 Cr to 44,229 Cr BFL 2.0 - AUM grew from ₹ 44,229 Cr to 3,30,615 Cr 0 Became omnipresent and fully digital 5 Early adopters of 26 58.1% Early adopters of data, digitalization analytics & decision 22 22 22 0 systems 20 21 21 5
Slide 29: BFL 1.0 and BFL 2.0 takeaways
2008-16 was BFL 1.0 and 2017-24 was BFL 2.0 BFL 1.0 – AUM grew from ₹ 2,478 Cr to 44,229 Cr BFL 2.0 - AUM grew from ₹ 44,229 Cr to 3,30,615 Cr 0 •1 BFL became a fully diversified non-bank (3 to 26 products) Became omnipresent •2 Being a technology first company, we were early adopters of and fully d
Slide 30: What is BFL 3.0 and a FINAI Company
Our journey from BFL 1.0 to BFL 2.0 has been fascinating. During this period, we have been through mostly good times & some very difficult times like Demonetization & Covid. However, what I am most excited about is the next phase of BFL which is ‘BFL 3.0 - A FINAI Company’. I have broken down BFL 3.
Slide 31: BFL 3.0
BFL 3.0 BFL 3.0 will be amongst the most sustainable and profitable companies in India and a pre-eminent choice for its 200 MM customer franchise for all their financial services needs. BFL aims to be the lowest cost operating model in financial services by accelerating business transformation and l
Slide 32: A FINAI Company
A FINAI Company BFL will be A FINAI company with AI enabled technology architecture, which integrates AI across all its processes to significantly improve customer engagement, grow revenue, reduce Opex, reduce credit costs, enhance productivity and strengthen controllership. 31
Slide 33: In summary, BFL 3.0 - A FINAI Company
In summary, BFL 3.0 - A FINAI Company BFL 3.0 - A FINAI Company will be a pre-eminent choice which meets all financial services needs of its 200 MM customers. Its AI enabled technology architecture that integrates AI across all its processes to deliver significant operating leverage and create a vir
Slide 34: Strategic framework of BFL 3.0 - A FINAI Company
Unveiling strategic framework of ‘BFL 3.0 – A FINAI Company’ 33
Slide 35: Strategies - BFL 3.0 - A FINAI Company
Strategies – BFL 3.0 – A FINAI Company Acquire Customers (1) Next 100 MM customers – Strategic partnerships, organic acquisition and Bajaj Prime Next Frontier of Growth (1) MSME – The next big growth engine Build Market Leadership – Amongst top 3 (4) PL - 50K to 50 lacs Gold Loan MFI Two Wheeler FIN
Slide 36: Strategies - AI across revenue, cost, risk and productivity
Strategies – BFL 3.0 – A FINAI Company AI for Revenue (2) Conversational AI for sell – 3X conversion rate Conversational AI for Cross sell - 3X conversion rate AI to Reduce cost (6) FTE productivity - 1.5X Field, 2X HO PSF productivity – 15% increase Reduce sales Contact center Reduce DMS contact ce
Slide 37: Implementation plan to become a FINAI Company
A detailed implementation plan has been created across all businesses and functions to become a FINAI Company. We are extremely excited about the AI era and the business transformation opportunity that it offers. 36
Slide 38: How will we look by FY29
As we deliver all this, let’s see how will we look by FY29… 37
Slide 39: LRS Outcomes
LRS Outcomes Sr No Basic Construct 6M FY25 LRS FY28 LRS FY29 1 Customer Franchise (MM) 92.1 130-140 190-210 2 Cross-sell Franchise (MM) 57.7 80-90 115-125 3 India payments GMV 0.27% 1.25-1.5% 0.4-0.5% 4 Share of total credit 2.11% 3-3.25% 3.2-3.5% 5 Share of retail credit 2.67% 3.8-4.0% 3.8-4.2% 6 L
Slide 40: Thank you
Thank you. Look forward to your continued support. 39
Slide 41: Disclaimer
Disclaimer This presentation has been prepared by Bajaj Finserv Limited (the “Company”) solely for your information and for your use. This presentation is for information purposes only and should not be deemed to constitute or form part of any offer or invitation or inducement to sell or issue any s
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