Bajaj Finance Q2 preview: Profit seen rising 29%, margins in focus

Bajaj Finance is expected to post a 29% year-on-year increase in consolidated net profit to about Rs 6,383 crore for July–September 2026, according to an average of five brokerage estimates reported by Economic Times Markets on October 18. The non-bank lender is scheduled to release its second-quarter results on Monday, October 19.

The consensus puts net interest income—the difference between interest earned and interest paid—at Rs 13,373 crore, an increase of 24% from a year earlier. The comparable year-earlier figures were Rs 4,948 crore for net profit and Rs 10,785 crore for net interest income. The September-quarter earnings figures are forecasts, not announced results.

Loan-book expansion underpins the earnings outlook

The company’s provisional business update earlier this month showed assets under management of approximately Rs 5.85 lakh crore as of September 30, 2026, up 26.5% from Rs 4.62 lakh crore a year earlier. It added around Rs 37,800 crore to its loan book during the quarter.

Its customer base reached 12.89 crore, compared with 11.06 crore a year earlier, while new loans booked rose 11% to 1.35 crore. Deposits stood at Rs 69,750 crore at the end of September.

The provisional AUM growth exceeded Motilal Oswal’s expectation of 25% year-on-year growth; the brokerage had also forecast a 5.6% sequential increase. Nomura had anticipated about 25% annual growth. PL Capital highlighted opportunities in gold loans and microfinance as Bajaj Finance broadens its portfolio alongside consumer finance, personal loans and commercial lending.

Higher funding costs could narrow margins

The larger loan portfolio is expected to lift interest income, but brokerages do not expect all of that growth to translate into stronger lending margins. Motilal Oswal forecasts a sequential decline of about 10 basis points in net interest margin to approximately 9.4%.

PL Capital also expects margin pressure, linking higher funding costs to an increase in bond yields. It anticipates some moderation in net interest margins during FY27, the financial year ending March 2027.

Non-bank lenders can face a squeeze when their borrowing costs rise before they can pass those increases on to customers. Management’s assessment of the margin outlook will therefore be a key part of the results commentary.

Brokerages expect broadly steady credit costs

Motilal Oswal expects credit costs, measured as a percentage of AUM, to remain broadly unchanged from the preceding quarter at about 1.55%. PL Capital forecasts around 1.6%, while Nomura projects a sequential improvement of seven basis points.

Those estimates point to expectations of relatively stable credit costs, rather than evidence of an already confirmed improvement in asset quality. Analysts will watch unsecured consumer loans, microfinance and other higher-yielding lending segments, alongside management’s guidance on future credit costs.