Bajaj Finance (BAJFINANCE) Q1 25/26 earnings summary

Executive summary

• Q1 FY26 saw strong growth in AUM, profitability, and customer additions, with AUM up 25% year-over-year to ₹441,450 crore, 13.5 million loans booked, and customer franchise reaching 106.51 million.

• Profit after tax rose 22% year-over-year to ₹4,765 crore; pre-provisioning operating profit increased 22% to ₹8,487 crore.

• Credit costs remained elevated, especially in MSME and two/three-wheeler segments, with loan losses at 2.02% of average AUM.

• Leadership transition ongoing: resignation of MD, with Rajeev Jain appointed as Vice Chairman and MD until March 2028.

• Digital transformation (FINAI) initiatives began to go live, with 150 dedicated staff and new digital capabilities.

Financial highlights

• Net interest income grew 22% year-over-year to ₹10,227 crore; net total income up 21% to ₹12,610 crore.

• Opex to total income at 32.7%; cost of funds improved to 7.79%.

• Loan losses and provisions rose 26% to ₹2,120 crore; loan loss to average AUM at 2.02%.

• Capital adequacy ratio at 21.96%; Tier-1 capital at 21.19%.

• Net NPA at 0.5%; GNPA at 1.03%.

Outlook and guidance

• FY26 cost of funds expected at 7.60–7.65%; NIM expansion of 10 bps possible by year-end.

• Fee income guidance at 13–15% for FY26; credit cost guardrail at 185–195 bps.

• AUM growth assessment held at 23–24% for FY26, with long-term guidance of 25–27% AUM growth and 23–24% profit growth.

• Company targets over 50 million new loans and 14–16 million new customers for FY26.