Bajaj Finserv Limited — Q1 FY26 earnings call

Call held 25 Jul 2025

Management summary

Bajaj Finserv reported a strong Q1 FY26, driven by robust performance across its insurance and lending businesses. The group achieved an-time high quarterly PAT, supported by healthy growth in gross written premiums for both general and life insurance, significant VNB expansion, and strong AUM growth in its lending arms. The company also provided updates on the ongoing Allianz joint venture exit and highlighted the continued focus on profitability and cost rationalization.

Highlights

  • Consolidated total income grew 13% YoY to INR 35,451 crores.

  • Consolidated PAT grew 30% YoY to INR 2,789 crores, an all-time high quarterly PAT.

  • Bajaj Allianz General Insurance (BAGIC) GWP grew 9% YoY to INR 5,202 crores, with PAT up 15% to INR 660 crores.

  • Bajaj Allianz Life Insurance (BALIC) GWP grew 9% YoY to INR 5,479 crores, and PAT surged 76% to INR 171 crores.

  • BALIC's Value of New Business (VNB) increased 39% YoY to INR 145 crores.

  • Bajaj Finance Limited (BFL) AUM grew 25% YoY to INR 4,41,450 crores, with consolidated PAT up 22% to INR 4,765 crores.

  • Bajaj Finserv Asset Management Company (AMC) AUM grew 107% YoY to INR 25,011 crores.

  • Bajaj Finserv Health Limited (eBH) executed 5.8 million health transactions, significantly up from 2.05 million last year.

Key financials

  1. Consolidated Total Income ₹35,451 Cr +13%YoY
  2. Consolidated PAT ₹2,789 Cr +30%YoY

What they filed

Q1 FY27: revenue up 19.1%, net profit up 18.2% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue33,704 32,042 36,595 35,288 37,403 +11%39,708 +24%38,494 +5%42,037 +19%
EBITDA12,283 12,373 12,728 14,315 14,050 +14%13,866 +12%14,511 +14%17,141 +20%
Net profit4,180 4,412 4,756 5,329 4,746 +14%4,368 −1%5,226 +10%6,297 +18%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Bajaj Allianz General Insurance (BAGIC)
    ₹5,202 Cr GWP₹660 Cr PAT21.4% ROE103.6% Combined Ratio₹35,199 Cr AUM
  • Bajaj Allianz Life Insurance (BALIC)
    ₹5,479 Cr GWP₹171 Cr PAT₹145 Cr VNB11.1% NBM53% Retail Protection Growth₹1.31L Cr AUM
  • Bajaj Finance Limited (BFL)
    ₹12,610 Cr Net Total Income₹4,765 Cr PAT19% ROE₹4.41L Cr AUM13.49 Mn New Loans Booked1% GNPA0.86% NNPA
  • Bajaj Housing Finance (BHFL)
    ₹583 Cr PAT24% AUM Growth₹887 Cr Net Interest Income0.3% GNPA0.13% NNPA
  • Bajaj Finserv Health Limited (eBH)
    5.8 Mn Health Transactions
  • Bajaj Markets
    ₹1,210 Cr Disbursements₹92 Cr Top Line
  • Bajaj Finserv AMC
    ₹25,011 Cr AUM

Capital allocation

high confidence
  • M&A 26% stake in BAGIC and BALIC (from Allianz SE) Acquisition · Pending regulatory

    Allianz SE's exit from joint venture agreements with BALIC and BAGIC.

    Approvals for the acquisition of 26% stake in each of BAGIC and BALIC by BFS and the promoter group companies have been received from both the Competition Commission of India and the Insurance Regulatory and Development Authority of India. Approval for name change, however, is in process. As indicated earlier, the acquisition may be in one or more tranches, of which the initial first tranche shall be for the minimum of 6.1% stake, which needs to be paid within 6 months of IRDAI approval. The outer timelines for the acquisition of the entire 26% stake stands on 16th October 2026 as per the SPA. Upon completion of the initial first tranche, the existing joint venture agreements between the company and Allianz SE in respect of both BALIC and BAGIC shall stand terminated, with Allianz having reduced rights until they hold 5% stake, below which their rights will fall away.
  • Liquidity Liquidity disclosed Insurance companies maintain strong solvency ratios, and lending businesses have healthy capital adequacy.
    Finally, both the insurance companies are financially among the most solvent in the industry, BALIC with a solvency of 343% and BAGIC at 334%. And hence, we are well poised to weather any external adversity. The capital adequacy ratio remains strong at 21.96% as of 30th June. Tier-1 capital was 21.19%. Bajaj Finserv app now has 7 crore net users and the FINAI transformation is progressing well. Capital adequacy ratio stood at 26.94% as on 30th June, and the Tier-1 capital was 26.43%.

Guidance & targets

Volume

  • New Loans Booked Volume · FY26 · High confidence over 50 million
    The company expects to disburse over 50 million new loans in the full financial year FY '26.

    — Mr. Ramandeep Singh Sahni

  • New Customers Added Volume · FY26 · High confidence 14 million to 16 million
    The company expects to add about 14 million to 16 million new customers to its franchise in the full year FY '26.

    — Mr. Ramandeep Singh Sahni

  • BALIC H2 Growth Volume · H2 FY26 · Medium confidence in full bloom
    As far as H2 is concerned, I expect our growth to be in full bloom.

    — Mr. Tarun Chugh

  • BALIC Agency Channel Growth Volume · after 3 months · Medium confidence healthy growth
    We expect for agency another 3 months impact on the growth because of this change. And then we should come back to seeing a healthy growth in agency.

    — Mr. Tarun Chugh

  • Bajaj Markets Growth Volume · Q2 FY26 onwards · Medium confidence reinstated
    We believe that the growth will get reinstated from quarter 2 onwards.

    — Mr. Ramandeep Singh Sahni

Profitability

  • BAGIC ROE (ex-surplus capital) Profitability · Annualized Q1 FY26 · Medium confidence upwards of 25%
    However, if we exclude the impact of surplus capital, which is assuming solvency at 200%, the ROE is expected to be upwards of 25%.

    — Mr. Ramandeep Singh Sahni

  • BALIC VNB and NBM Growth Profitability · ongoing · Medium confidence on planned trajectory
    The VNB and NBM growth is on planned trajectory.

    — Mr. Ramandeep Singh Sahni

Margin

  • BAGIC Combined Ratio Margin · over time · Medium confidence close to 100%
    as an endeavour for our company, we always seek to maintain a combined ratio close to 100% is what I've always mentioned over time. And that's what it remains, and that is what our endeavour shall always be

    — Mr. Tapan Singhel

Other

  • Motor TP Price Hike Other · some time · Low confidence some action happening
    On TP, for the past 3 to 4 years, there has been no price hike at all. So, that is what industry has been asking for it, and there would be in our belief some action happening on that. We believe in some time; some details should be there on the price hike.

    — Mr. Tapan Singhel

What to watch in Q2 FY26

BAGIC Combined Ratio

Over time / Next quarter
Current 103.6% (102.5% ex-1/N impact)
Target Close to 100%

Why it matters

Key profitability metric for general insurance; management aims to maintain it near 100%.

as an endeavour for our company, we always seek to maintain a combined ratio close to 100% is what I've always mentioned over time. And that's what it remains, and that is what our endeavour shall always be

Risks & concerns

  • Competitive intensity in general insurance

    medium

    Management acknowledged ongoing competition but emphasized focus on profitable business segments and disciplined underwriting.

    Analyst acknowledged

  • Degrowth in BALIC's group protection business

    medium

    Group protection struggled due to slowdown in loan disbursals, particularly in the MFI space, and recovery is linked to overall credit uptake.

    Analyst acknowledged

  • Bajaj Markets top-line fall and lower disbursements

    medium

    Top-line and disbursements fell due to a scheduled change in Bajaj Markets' digital journey, but growth is expected to reinstate from Q2 onwards.

    Management acknowledged

  • Muted top-line growth in BALIC

    low

    Muted top-line growth in Q1 was strategic, aligning with BALIC 2.0's focus on sustainable and profitable growth, with VNB and NBM on planned trajectory.

    Management acknowledged

  • Degrowth in BALIC's agency channel

    low

    Temporary degrowth in the agency channel is due to strategic changes in cost reduction, product shift, and commission deferment, with recovery expected in 3 months.

    Analyst acknowledged

Q&A highlights

5 direct
BAGIC competitive intensity in motor TP and fire, profitability in micro markets, motor TP price hike. Direct
competition has always been there... If you look at our portfolio in fire for example, we are one of the dominant players in the market in the large space. On TP, for the past 3 to 4 years, there has been no price hike at all. So, that is what industry has been asking for it, and there would be in our belief some action happening on that.

Addresses concerns about competitive pressure in key segments and signals potential positive regulatory action on motor TP pricing.

Asked by Swarnabha Mukherjee

BAGIC combined ratio creeping above 100%, will it go back below 100%? Partial
as an endeavour for our company, we always seek to maintain a combined ratio close to 100% is what I've always mentioned over time. And that's what it remains, and that is what our endeavour shall always be... Now will it be below 100? Will it be over 100? I think that as the business and things progress, which will be there. But will always be close to 100.

Clarifies management's long-term target for combined ratio, indicating a commitment to profitability despite current pressures.

Asked by Swarnabha Mukherjee

BALIC agency channel degrowth, underlying product mix, VNB generation. Direct
agency has a 5-year CAGR of 25%. So, it's a healthy growth despite this year, we have particularly taken a pause for a specific reason. Agency did most of the heavy lifting of the changes that we did in terms of cost reduction, in terms of product shift, in terms of a focus on term... We expect for agency another 3 months impact on the growth because of this change. And then we should come back to seeing a healthy growth in agency.

Explains the strategic reasons behind the temporary agency channel degrowth and provides a timeline for its recovery, linking it to profitability improvements.

Asked by Swarnabha Mukherjee

BALIC product mix shift, margin delta, product structure changes. Direct
The margin delta is healthy. And I think we're going to be one of the highest deltas in the industry this year... The product mix of course, with term coming in, gets to be a very useful piece from a profitability perspective. 30% of our customers in agency now are added through term. We have changed product structures significantly... In addition, we've also looked at cost reductions, which is going to help in the margin delta.

Details the drivers of BALIC's improved margins, emphasizing strategic product mix changes and cost efficiencies.

Asked by Supratim

BAGIC tender-based business outlook, capital gains. Direct
Our endeavour is always to be at the right price, if we get a tender, good. If we don't get a tender, so be it. We are not somebody who in desperation would do business just for the sake of pushing up top line... on capital gains, we have booked a capital gain of around INR450 crores coming from both debt and equity. The larger part of the growth is from the debt book.

Highlights a disciplined approach to tender business, prioritizing profitability over top-line growth, and quantifies capital gains for the quarter.

Asked by Sanketh Godha

BALIC cost rationalization measures, persistency drop (13/49 months). Direct
on the cost side, the action actually taken has been a 360-degree action... commission deferment and reduction. There has been a reduction in variable spends. There has been reduction in fixed costs... And good thing is now these cohorts are slowly moving to the latter half, and that should move out of the 61st soon, the way it's going. That said, our 25th-month persistency is up, our 37th-month persistency is up, and our 61st-month persistency is also improving.

Provides details on comprehensive cost-cutting initiatives and clarifies the improving trend in persistency despite some short-term dips.

Asked by Shobhit Sharma

3 min read 7 chapters

Detailed narrative

Consolidated Performance Overview

Bajaj Finserv reported a strong Q1 FY26, with consolidated total income growing 13% year-on-year to INR 35,451 crores, up from INR 31,480 crores in the same period last year. Consolidated Profit After Tax (PAT) surged 30% to an all-time high of INR 2,789 crores, compared to INR 2,138 crores last year. The PBT growth was 21%, with the delta attributed to higher tax on dividends in Q1 of the previous year.

Bajaj Allianz General Insurance (BAGIC) Performance

BAGIC's Gross Written Premium (GWP) increased 9% year-on-year to INR 5,202 crores. Excluding crop and government health business and the impact of 1/N regulations, GWP growth was a healthy 15%, outpacing the industry's 14%. PAT grew 15% to INR 660 crores, driven by better investment performance, and the combined ratio stood at 103.6%, improving from 103.7% last year. The annualized ROE was 21.4%, with an expectation to reach upwards of 25% excluding surplus capital.

Bajaj Allianz Life Insurance (BALIC) Performance

BALIC's GWP grew 9% year-on-year to INR 5,479 crores, while PAT saw a significant 76% increase to INR 171 crores. The Value of New Business (VNB) registered a 39% increase, reaching INR 145 crores, and the New Business Margin (NBM) expanded by 4.2% to 11.1%. Retail protection business grew 53% to INR 110 crores, reflecting the BALIC 2.0 strategy focused on sustainable and profitable growth, despite muted top-line growth in Q1.

Lending Businesses (BFL & BHFL) Update

Bajaj Finance Limited (BFL) reported a 25% year-on-year AUM growth, reaching INR 4,41,450 crores, and a 22% increase in consolidated PAT to INR 4,765 crores. New loans booked grew 23% to 13.49 million, and the company expects to disburse over 50 million new loans and add 14-16 million new customers in FY26. Bajaj Housing Finance Limited (BHFL) also had a strong quarter, with PAT growing 21% to INR 583 crores and AUM growing 24%, supported by robust growth across all segments.

Platform Businesses (Health, Markets, AMC)

Bajaj Finserv Health Limited (eBH) significantly expanded its health transactions to 5.8 million, up from 2.05 million last year, leveraging its growing provider network. Bajaj Markets saw a temporary dip in top-line and disbursements due to a scheduled digital journey change, with growth expected to reinstate from Q2. Bajaj Finserv Asset Management Company (AMC) demonstrated strong growth, with AUM increasing 107% year-on-year to INR 25,011 crores, with 83% of AUM from non-group sources.

Allianz Joint Venture Exit Update

Approvals have been received from both the Competition Commission of India and IRDAI for Bajaj Finserv and its promoter group companies to acquire Allianz SE's 26% stake in both BAGIC and BALIC. The initial tranche, a minimum of 6.1% stake, is expected to be paid within 6 months of IRDAI approval, after which the existing joint venture agreements will terminate. The full acquisition of the 26% stake is targeted by October 16, 2026.

Cost Rationalization and Profitability Focus

Management emphasized a comprehensive 360-degree approach to cost rationalization across BALIC, including commission deferment, reduction in variable and fixed spends, and process re-engineering. This focus, alongside strategic product mix changes (e.g., increased term focus in BALIC) and disciplined underwriting in BAGIC, is aimed at driving sustainable profitability and margin expansion across the businesses. The company also highlighted improving persistency rates for BALIC across various buckets.

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