Bajaj Finance Q2 profit rises 29% to Rs 6,367 crore

Bajaj Finance’s consolidated net profit rose 29% year-on-year to Rs 6,367 crore in the quarter ended September 2026, from Rs 4,948 crore a year earlier, according to Economic Times Markets. Growth in its loan portfolio and net interest income, together with lower loan losses after excluding additional provisions, supported the earnings increase.

Net interest income increased 24% to Rs 13,335 crore, compared with Rs 10,785 crore a year earlier. Net total income rose 23% to Rs 15,974 crore.

Consolidated assets under management (AUM) reached Rs 5.85 lakh crore at September 30, up 26% year-on-year. The lender added Rs 37,680 crore to AUM during the quarter, while assets under finance increased 27% to Rs 5.74 lakh crore.

FY27 growth targets underpin proposed capital raise

Management expects AUM to expand 26-27% in FY27. It is targeting 60-62 million new loans and 18-20 million additional customers during the financial year; these are forward-looking targets rather than completed disbursements or customer additions.

Vice-chairman Rajeev Jain linked the proposed Rs 17,500-crore capital raise, through a qualified institutional placement and preferential warrants, to growth opportunities for India and the company.

The growth outlook comes with some expected pressure on margins. Management anticipates a marginal narrowing of the net interest margin, citing a rise in the repo rate.

Gold-loan expansion brings a transitional asset-quality issue

The gold-loan portfolio more than doubled to Rs 24,195 crore from Rs 11,789 crore a year earlier. Bajaj Finance had 2,022 gold-loan branches at the end of September and aims to increase that network to 2,700-2,800 by the end of FY27.

Management attributed an increase in Stage 2 gold-loan assets to certain short-tenor schemes that the company has stopped offering. Jain characterised the movement as transitional and said the lender would seek to offer longer-tenure loans.

Management does not expect that movement to affect credit costs. That assessment remains an expectation, distinct from the quarter’s reported asset-quality results.

Lower funding costs and improved NPA ratios

The cost of funds fell nine basis points from the preceding quarter to 7.31%. Consolidated borrowings stood at about Rs 5 lakh crore at September-end, with money markets accounting for 52%, banks 29%, deposits 14% and external commercial borrowings 5%.

The consolidated deposit book was Rs 69,754 crore, while the liquidity buffer stood at Rs 19,995 crore.

Gross non-performing assets declined to 1.06% from 1.24% a year earlier, and net NPAs fell to 0.42% from 0.60%. Provision coverage on Stage 3 assets was 60%.

Reported provisions rose, but adjusted losses declined

Total loan losses and provisions increased 4% to Rs 2,166 crore. That figure included Rs 337 crore in additional provisions for management prudence and macroeconomic risks.

Excluding those additional provisions, loan losses fell 12% to Rs 1,829 crore. The distinction matters: the reported provision charge rose even as the adjusted measure improved.

Net profit before the additional provisions was Rs 6,619 crore, up 34%. That adjusted figure is separate from the reported consolidated net profit of Rs 6,367 crore.