Bajaj Finance Q4 Results: Net Interest Income Up 21%, Asset Quality Improves

Bajaj Finance Ltd.'s consolidated net profit rose 16% in the quarter ended March, missing analysts' estimates.

The non-banking financial company posted a bottom line of Rs 3,940 crore in the quarter ended March, according to an exchange filing on Tuesday. Analysts tracked by Bloomberg had pegged the profit after tax at Rs 4,230 crore.

The net interest income increased 21% in the March quarter to Rs 8,910 crore, as against Rs 7,340 crore in the year-ago period.

Asset quality improved, with the gross non-performing assets ratio improving to 0.96% at the end of March quarter as against 1.12% a quarter ago. The net NPA ratio also improved to 0.44% compared with 0.48% in the prior quarter.

However, loan losses and provisions for the quarter were higher at Rs 2,300 crore as against Rs 1,278 crore a year ago. The company also made an additional provision of Rs 359 crore on account of the redevelopment of its expected credit loss model. Excluding this adjustment, loan losses and provisions for the March quarter amounted to Rs 1,941 crore.

Assets under management of Bajaj Finance grew 26% year-on-year to Rs 3.08 lakh crore.

The company also laid out its long-term guidance by pegging the AUM growth at 25–27% and profit growth at 23–24%, unchanged from the previous quarter.

It expects the gross NPA ratio in the range of 1.2–1.4% and a net NPA ratio in the corridor of 0.4–0.5%. However, it has tweaked its profitability estimates, pegging the return on assets at 4.3-4.7% from 4.6–4.8% estimated in the December quarter and return on equities at 19–21% from 21–23% earlier.

During the March quarter, deposits of the non-bank lender rose 19% on-year to Rs 71,403 crore. The company has moderated pricing in select unsecured businesses and now expect cost of funds to go down by 10–15 basis points in the current financial year.

"We expect the cost of funds to go down to 7.75–7.85% by the end of FY26," Managing Director Anup Saha said in an analyst call. "If there is 10–15 basis points improvement in cost of funds, then there will be a positive bias on NIMs."

Overall, it expects net interest margin to remain stable in fiscal 2026 and expects fees and charges to grow by 13–15% in FY26 as it has discontinued its card business.

On a consolidated basis, the AUM of car loans recorded a 68% YoY growth to Rs 11,876 crore, followed by gold loans at 81% to Rs 8,307 crore.

In terms of outstanding numbers, mortgages contributed the most to the overall AUM to Rs 1.29 lakh crore, up 25% YoY, and urban business-to-consumer loans grew 33% YoY to Rs 87,696 crore. The SME lending was up 31% YoY to Rs 50,345 crore and two and three-wheeler finance declined by 12% to Rs 17,319 crore. Rural B2C loans grew 22% to Rs 21,467 crore.

The company is seeing good growth in secured and its gold loan businesses and as it winds down its two- and three-wheeler segment by March–June 2026, it believes that its overall loan growth target is reasonable and as it plans to grow across segments and add customer franchise, the management had said during the concall.

Before the quarterly results were declared, shares of Bajaj Finance closed flat at Rs 9,089.3 apiece on the BSE, compared to 0.09% rise in the benchmark Sensex.