
Bajaj Finance Q1 Results: Net Profit Surges 22% to Rs 4,765 Crore on Strong Loan Growth
Leading non-banking financial company Bajaj Finance delivered robust performance in the first quarter of FY26, reporting a 22% jump in consolidated net profit to Rs 4,765 crore for the quarter ended June 30, 2025, compared to Rs 3,912 crore in the corresponding period last year. The strong growth was primarily driven by healthy loan portfolio expansion and improved operational efficiency.
Revenue Growth Momentum Continues
Bajaj Finance maintained its growth trajectory with consolidated revenue rising 21% to Rs 19,524 crore compared to Rs 16,100 crore in Q1 FY25. This consistent revenue expansion reflects the company's successful strategy of diversifying its lending portfolio while maintaining strong market positioning across various financial products.
The NBFC's core income metrics showed impressive performance:
- Net Interest Income: Rs 10,227 crore (22% YoY growth)
- Net Total Income: Rs 12,610 crore (21% YoY growth)
- New Loans Booked: 13.49 million (23% YoY growth)
- Customer Franchise: 106.51 million (21% YoY growth)
Substantial Customer Base Expansion
Bajaj Finance demonstrated exceptional customer acquisition capabilities, with its customer franchise growing to 106.51 million as of June 30, 2025, compared to 88.11 million in the same period last year, representing a robust 21% year-on-year growth.
During Q1 FY26 alone, the company added 4.69 million new customers, highlighting its strong market penetration and brand appeal across diverse customer segments. The number of new loans booked reached 13.49 million compared to 10.97 million in Q1 FY25, showcasing healthy demand for the company's financial products.
Assets Under Management Reaches New Heights
The company's Assets Under Management (AUM) grew 25% to Rs 4.42 lakh crore as of June 30, 2025, from Rs 3.54 lakh crore in the corresponding period last year. This significant expansion underscores Bajaj Finance's successful strategy of scaling its lending operations across multiple product categories.
The AUM composition reveals a diversified portfolio structure:
- Mortgages: Rs 1.36 lakh crore (largest component)
- Urban B2C Loans: Rs 92,333 crore
- MSME Lending: Rs 52,538 crore
- Microfinance Loans: Rs 1,556 crore (newly reported segment)
However, the Two & Three-Wheeler Finance AUM declined 20% to Rs 15,703 crore from Rs 19,689 crore year-on-year, reflecting market dynamics in the auto financing segment.
Asset Quality Considerations
While maintaining strong growth, Bajaj Finance experienced some moderation in asset quality metrics. Gross NPA increased to 1.03% from 0.86% year-on-year, while Net NPA rose to 0.50% from 0.38% in the same comparison period.
The company maintained a provisioning coverage ratio of 52% on stage 3 assets, demonstrating prudent risk management practices. During Q1 FY26, there was a net increase in stage 2 & 3 assets of Rs 878 crore, including Rs 219 crore of standard accounts that were restructured.
Loan losses and provisions increased 26% to Rs 2,120 crore compared to Rs 1,685 crore in Q1 FY25, reflecting the company's proactive approach to credit risk management amid portfolio expansion.
Cost Management and Liquidity Position
Bajaj Finance demonstrated effective cost management with its cost of funds improving by 20 basis points quarter-on-quarter to 7.79%. The company projects FY26 cost of funds to be in the range of 7.60-7.65%, indicating continued focus on optimizing funding costs.
The company maintained a robust liquidity buffer of Rs 14,922 crore as of June 30, 2025, ensuring adequate financial flexibility for growth initiatives and market uncertainties.
Deposits book grew 15% year-on-year to Rs 72,109 crore, contributing 19% of consolidated borrowings. However, the company plans to reduce reliance on deposits over the next 12 months to optimize funding costs.
Subsidiary Performance
Bajaj Housing Finance
The housing finance subsidiary delivered strong performance with net profit rising 21% to Rs 583 crore from Rs 483 crore year-on-year. Assets under management grew 24% to Rs 120,420 crore, while net interest income surged 33% to Rs 887 crore.
Asset quality remained excellent with Gross NPA at 0.30% and Net NPA at 0.13%, demonstrating superior credit underwriting in the housing finance segment.
Bajaj Financial Securities
The securities business showed impressive growth with net profit jumping 37% to Rs 41 crore. Assets under finance expanded 39% to Rs 6,098 crore, while net interest income increased 31% to Rs 63 crore.
Market Response and Valuation
Despite the strong financial performance, Bajaj Finance shares closed 4.71% lower at Rs 913.75 on July 25, 2025, with high trading volumes of over 24 million shares. The market reaction suggests investor concerns about asset quality trends and competitive pressures in the NBFC sector.
The stock's intraday range was between Rs 898.00 and Rs 924.90, indicating significant volatility as investors digested the quarterly results and management commentary.
Strategic Outlook and Growth Drivers
Bajaj Finance's Q1 FY26 results demonstrate the company's ability to maintain strong growth momentum while expanding its customer base and diversifying its product portfolio. The introduction of microfinance lending and continued strength in mortgages and urban consumer lending provide multiple growth avenues.
Key factors supporting future growth include:
- Market Leadership: Strong brand recognition and distribution network
- Product Diversification: Expanding into new lending segments
- Digital Capabilities: Technology-driven customer acquisition and servicing
- Cost Optimization: Improving funding cost structure
The company's focus on optimizing its funding mix and maintaining adequate liquidity positions it well to navigate market challenges while capitalizing on growth opportunities in India's expanding financial services market.
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