Bajaj Finance Pegs FY26 Credit Cost Below 2% As Collections Improve

Given the overall environment from results across the board, it gives Bajaj Finance greater deal of confidence that if one more quarter goes well, the non-bank lender will be in a comfortable position, Jain said.

He said the company would get greater confidence as it traverses through the March quarter. In the third quarter, consolidated loan losses and provisions rose to Rs 2,043 crore, higher than Rs 1,909 crore a quarter ago and Rs 1,248 crore a year ago.

Given the current macroeconomic environment, Jain expects to grow the balance sheet on a consolidated basis by 25%, maintain credit costs at below 2% and deliver a 20–25% of profit growth in the next fiscal.

On asset quality, the company said used car vehicles account for the rise in delinquencies as bounce rates are 11–12%. Urban B2C, a major segment for the lender, witnessed slower default rates and collection efficiency. Jain expects recovery in this segment to take the longest to return to normalcy.

Higher net interest income lifted the bank's net profit for the quarter ended December, but it was capped by the rise in provisions and bad loans.

Asset quality worsened, with the gross NPA ratio rising to 1.12% at the end of December as against 1.06% a quarter ago. The net NPA ratio also rose to 0.48% compared with 0.46% in the prior quarter.

On a consolidated basis, the AUM of car loans recorded a 97% YoY growth to Rs 11,141 crore, followed by gold loans at 81% to Rs 7,267 crore.

In terms of outstanding numbers, mortgages contributed the most to the overall AUM to Rs 1.22 lakh crore, up 26%, and urban business-to-consumer loans grew 35% to Rs 83,143 crore. The SME lending was up 31% YoY to Rs 46,943 crore and two and three-wheeler finance declined 2% to Rs 18,972 crore. Rural B2C loans grew 16% to Rs 20,135 crore.