Q1 FY26: Standout Numbers & Momentum

Interactive Chart: Bajaj Finance Growth Trends (FY25 – FY26 Q1)

Bajaj Finance delivered robust numbers for Q1 FY26, continuing its strong track record of double-digit growth across all key indicators. Net profit surged by 22%, aided by a 21% jump in consolidated revenue and a consistent expansion in its loan book, customer franchise, and AUM. The number of new loans booked and the increase in customers highlight the company’s growing reach and appeal across urban, rural, and MSME segments.

Key Business Drivers: Diversification, Digital, and Deposits

AUM Composition: Diversified Engines of Growth

• Mortgages: ₹1.36 lakh crore (core driver)
• Urban B2C Loans: ₹92,333 crore
• MSME Lending: ₹52,538 crore
• Two & Three-Wheeler Finance: ₹15,703 crore (-20% YoY)
• Microfinance Loans: ₹1,556 crore (reported for the first time)

The expansion in mortgages and the steady climb in both B2C and MSME lending reflect Bajaj Finance’s broad-based growth approach. Notably, the decline in the two & three-wheeler AUM—attributed to competitive pressures and a strategic rebalancing toward high-yield segments—provides critical context for investors watching sectoral bets.

Customer Franchise & Digital Momentum

• Added 4.69 million net new customers in Q1 FY26
• Customer base now at 106.5 million

This rapid growth is supported by robust digital origination and end-to-end processing platforms, further reducing acquisition costs and deepening customer engagement.

Deposits and Liquidity Position

• Deposits Book: ₹72,109 crore (+15% YoY)
• Deposits now constitute 19% of consolidated borrowings
• Liquidity buffer: ₹14,922 crore maintained to ensure resilience

Bajaj Finance has signaled a reduction in deposit dependence for the coming 12 months to optimize cost of funds, which improved 20 basis points sequentially to 7.79%. The company expects this metric to settle between 7.60% – 7.65% for FY26, providing ample headroom for margin protection and funding flexibility.

Asset Quality: Resilience With Emerging MSME Stress

Segmental Insights

• Overall asset quality remains sound, with rising NPAs primarily isolated to the MSME book.
• Net increase of ₹878 crore in stage 2 and 3 assets in Q1, including ₹219 crore attributable to restructured standard accounts.
• MSME portfolio stress is closely monitored; the company is otherwise seeing improved delinquency and recoveries in other major portfolios.
• Provisioning remains healthy, with a coverage ratio of 52% on stage 3 assets.

Bajaj Housing Finance & Securities Subsidiaries: Strong Asset Quality

• Bajaj Housing Finance:
  • Net profit up 21% YoY
  • Gross NPA: 0.30%, Net NPA: 0.13%
  • Asset quality steady with provisioning ratio of 56%
• Bajaj Financial Securities:
  • Net profit up 37% YoY
  • Assets under finance up 39% YoY

Despite concerns in the MSME sector, group subsidiaries have delivered both solid growth and robust underwriting performance.

Investor Outlook: Growth, Opportunities, and Watchpoints

Bajaj Finance’s performance in Q1 FY26 reaffirms its leadership among NBFCs, with an expansive portfolio, steady profitability, and a growing customer base. Its ongoing investments in digital infrastructure, risk management, and segment diversification position it well to capture new demand across India’s consumer and SME ecosystems.

• Strong growth tailwinds should persist as operational improvements, new origination technologies, and expansion into underserved segments ramp up.
• Rising NPA ratios in MSME and unsecured segments warrant close monitoring, especially if broader macroeconomic volatility emerges.
• Management’s proactive risk and capital management stance, with a focus on healthy liquidity buffers and high coverage ratios, strengthens the investment case for long-term holders.
• Guidance remains measured, reflecting confidence in core growth levers but also a willingness to course-correct in segments that show disproportionate risk.

Share price volatility surrounding Q1 results signals that, while the market lauds Bajaj Finance’s resilience and growth, it remains attentive to any signs of asset quality slippage or changing policy stance. The company’s updated commentary and transparent communication around MSME stress will be critical for reassuring investors as FY26 progresses.