Bajaj Finance Q1 Results: From Growth Outlook To MSME Stress, Here Are Five Key Takeaways
Vice Chairperson Rajeev Jain laid out the roadmap for the company, covering leadership clarity, credit cost trends and cautious growth strategy.
A sharp rise in net interest income and a robust loan book helped Bajaj Finance Ltd. post a 22% year-on-year jump in consolidated net profit to Rs 4,765 crore in the quarter ended June.
Assets under management rose 25% YoY to Rs 4.41 lakh crore, led by strong momentum in mortgages, urban B2C loans, and SME lending. However, elevated provisions and a slight deterioration in asset quality capped further gains.
Against this backdrop, Vice Chairperson Rajeev Jain laid out the roadmap for the company, covering leadership clarity, credit cost trends and cautious growth strategy.
Here are the top five takeaways from Jain's commentary:
Rajeev Jain To Continue In Operating Role Till March 2028
Jain confirmed there is “no ambiguity” about his continued operational involvement at Bajaj Finance until March 2028. His return to the executive role is intended to ensure business continuity and organisational stability.
Jain added that a comprehensive succession plan would be presented to the board within six months, with formal discussions on leadership transition expected closer to fiscal 2028.
Credit Cost To Remain Within 185–195 bps For FY26
The company expects credit costs to remain elevated in fiscal 2026, primarily due to the ongoing wind-down of its two-wheeler and three-wheeler financing businesses. By March 2026, the two-wheeler and three-wheeler loan book is expected to fall below Rs 3,000–4,000 crore.
Excluding this segment, the asset mix is expected to remain unchanged over the next three years. From the third quarter onwards, credit costs are expected to decline, with the two-wheeler and three-wheeler exit likely to save 5–7 basis points annually on credit cost.
Caution Amid Elevated Consumer Leverage And MSME Stress
Jain highlighted concerns around rising consumer leverage and early signs of stress in the MSME segment, which has shown pressure since February. Out of 17 key MSME-linked industries tracked by Bajaj Finance, 13 are showing signs of slowdown.
Jain noted that the combination of a slowing economy and tightening credit supply remains a worry, and MSME growth is expected to be moderate this year.
Margin Likely To Stay Flat With Slight Positive Bias
The company guided for a flattish net interest margin profile for fiscal 2026, with a possible 5–10 basis point upside. Bajaj Finance will continue to rely heavily on bonds and external commercial borrowings over the next 12 months to reduce funding costs and maintain margin stability.
Growth Outlook Intact But More Clarity By Second Quarter
Bajaj Finance is holding on to its fiscal 2026 AUM growth guidance of 23–24%, but Jain said a clearer view will emerge after the second quarter. The gold loan segment alone is contributing Rs 2,000 crore per quarter to the AUM.
The company continues to focus on balancing AUM expansion with profitability, leveraging its distribution network to acquire 1.4–1.6 crore customers annually. Notably, Bajaj Finance remains one of the few private players with a customer base exceeding 10 crore.
