Bajaj Finserv Limited — Q2 FY26 earnings call

Call held 11 Nov 2025

Management summary

Bajaj Finserv reported a strong Q2 FY26, with consolidated total income and PAT showing healthy growth, driven by robust performance across its lending and insurance subsidiaries. Bajaj Life demonstrated significant VNB and margin expansion, despite short-term GST impacts. The company's emerging businesses, particularly Health and Asset Management, continued their scaling efforts, while the Allianz stake acquisition is progressing towards conclusion.

Highlights

  • Consolidated total income grew 11% YoY to INR 37,400 crores.

  • Consolidated PAT increased 8% YoY to INR 2,244 crores, or 12% excluding MTM movements.

  • Bajaj General Insurance GWP grew 9% to INR 6,413 crores (13.6% excluding 1/n impact), with PAT up 5% to INR 517 crores.

  • Bajaj Life Insurance VNB surged 50% YoY to INR 367 crores, and new business margins expanded to 17.1%.

  • Bajaj Finance AUM grew 24% YoY to INR 4,62,000 crores, with PAT increasing 23% to INR 4,948 crores.

  • Bajaj Housing Finance AUM also grew 24%, and PAT was up 18% to INR 643 crores.

  • Bajaj Finserv Health saw health transactions more than double YoY to 6.2 million, and revenue from operations grew 22%.

  • Bajaj Finserv AMC's AUM crossed INR 30,000 crores, growing 77% YoY.

Key financials

  1. Consolidated Total Income ₹37,400 Cr +11%YoY
  2. Consolidated PAT ₹2,244 Cr +8%YoY
  3. Consolidated PAT (ex-MTM) — +12%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

SegmentProfit After Tax (PAT)AUM
Bajaj General Insurance₹517 Cr₹35,000 Cr
Bajaj Life Insurance₹13 Cr₹1.32L Cr
Bajaj Finance₹4,948 Cr₹4.62L Cr
Bajaj Housing Finance₹643 Cr—
Bajaj Finserv Health Limited——
Bajaj Finserv Asset Management Company——

Capital allocation

high confidence
  • M&A Allianz's stake in insurance companies Acquisition · Pending regulatory

    Completing the acquisition of Allianz's stake in our insurance companies and rebranding to Bajaj General Insurance Limited and Bajaj Life Insurance Limited.

    I am happy to confirm that necessary approvals for the acquisition have been received, namely from CCI, IRDAI. also, the approval for name changes of the 2 companies have been received from ROC. Post these approvals, the names of our 2 insurance companies have now been changed to Bajaj General Insurance Limited and Bajaj Life Insurance Limited. We are now preparing to conclude the acquisition of Allianz's stake in our insurance companies in the next few months.
  • Liquidity Liquidity disclosed Both insurance companies have excess capital; Life is consuming it for growth, Non-life is generating capital. Capital consumers are only Health business and AMC, not requiring significant capital at the moment.
    We do have excess capital in both the companies. In the case of Life, we are consuming it. And hopefully, we are consuming it very well for the right products and the right growth. In the case of non-life, we are generating capital. ... currently our capital consumers are only our Health business and our AMC. And therefore, it is not significant capital that we need at the moment. So, we are quite comfortable at this stage.

Guidance & targets

Market Share

  • Bajaj Life Term Protection Share Market Share · medium term (2 to 3 years) · High confidence 10% odd
    So, we have said that in medium term, that's in about 2 to 3 years, our term protection share should be 10% odd. And I think we are rightly headed in that direction.

    — Vipin Bansal

Profitability

  • Bajaj Finserv Health Break-even Profitability · FY28 · High confidence break even
    we are very clear in next-to-next financial year, we should break even. ... No, FY'28.

    — Devang Mody

  • Bajaj Life GST Impact Mitigation Profitability · next 2 quarters · Medium confidence mitigate most of it
    I think probably 2 quarters, we will have this noise or impact of GST. It's a transient impact. We do believe that over the next 2 quarters, we should be able to mitigate most of it.

    — Vipin Bansal

  • Bajaj General Motor OD Loss Ratio Profitability · by year-end · Medium confidence come down to normal levels
    It's just a quarterly blip. This will come down by the year-end is what we believe. With all the actions we are taking, we will come down to normal levels for full year is what I believe.

    — Ramandeep Sahni

What to watch in Q3 FY26

Bajaj Life GST Impact Mitigation

next 2 quarters
Current 140 bps NBM impact (50 bps back book, 90 bps new business)
Target Mitigation of most of the GST impact on NBM

Why it matters

To assess the effectiveness of management's actions in offsetting the GST-related loss of input tax credit and its impact on Bajaj Life's profitability.

I think probably 2 quarters, we will have this noise or impact of GST. It's a transient impact. We do believe that over the next 2 quarters, we should be able to mitigate most of it.

Risks & concerns

  • GST impact on insurance profitability

    medium

    Loss of input tax credit due to new GST regulations caused a short-term PAT impact of INR 112 crores for Bajaj Life, with management expecting mitigation over the next two quarters.

    Management acknowledged

  • Higher acquisition costs in Bajaj General Insurance

    medium

    Higher acquisition costs, particularly for writing preferred lines of business and long-term products, impacted underwriting losses and PAT for Bajaj General.

    Management acknowledged

  • Elevated credit costs in Bajaj Finance

    medium

    Credit costs remained elevated, primarily due to the 2 & 3-wheeler segment and the MSME business, leading to a 19% increase in net losses and provisions.

    Management acknowledged

  • Intense price competition in general insurance market

    medium

    Bajaj General operates in an intensely price competitive market, requiring prudent underwriting and focus on best-in-class customer service to maintain performance.

    Management acknowledged

  • Regulatory changes impacting insurance businesses

    medium

    Upcoming changes like IndAS, RBC, and IRDAI's ongoing progress will impact how numbers are reported and profitability is measured for insurance companies over the next 2-3 years.

    Management acknowledged

Q&A highlights

5 direct
GST impact on Bajaj Life's New Business Margins (NBM) Direct
on H1 basis, the impact on NBM is 140 bps on account of GST. 50 bps of this impact is from the back book... rest 90 bps is for the business that was written from 22nd September to 30th September,25... If I was to annualize this... the impact should be about 450 bps. ... We expect another 2 quarters for settling this entire process and taking all measures that we are intending to take.

Clarified the specific financial impact of GST on Bajaj Life's margins and the management's strategy and timeline for mitigation.

Asked by Mahek, Emkay Global

Sustainability of Bajaj Life's margin improvement and H2 growth outlook Direct
cost optimization that we were doing is giving us anything between 100 and 125 bps of margin expansion. ... anything about 400 bps is coming out of the mix, rest is coming out of product repricing... The studied strategy that we had on a flattish 4 quarters is over, and that ended September,25. And here on, you should see a trajectory on growth.

Provided a breakdown of factors contributing to margin expansion and signaled a shift from flat growth to a growth trajectory for Bajaj Life, supported by GST tailwinds.

Asked by Sanketh Godha, Avendus Spark

Listing plans for Life and General Insurance businesses Partial
our focus is on completing the acquisition... It will get done over the next few months... After that, we will have to review. It is something I don't think in the next 2, 3 years, we are seeing anything. We have other developments in the industry. We have IndAS coming up. We have RBC coming up, and then IRDAI is making progress on that with successive interactions with the companies.

Indicated that while a listing is not imminent (next 2-3 years), it remains a possibility after the Allianz acquisition is complete and regulatory changes are absorbed, impacting long-term capital strategy.

Asked by Nidhesh Jain, Investec India

Bajaj General's combined ratio consistently above 100% and path to below 100% Direct
industry combined ratio, it has been over 115% between 115% and 120%. So, Bajaj General has been beating the industry combined ratio by full 15 percentage points... ROE for Bajaj General (BAGIC) is currently over 20%. In fact, for the second quarter, we are delivering an ROE of around 24%.

Management defended the combined ratio by comparing it favorably to industry averages and highlighting strong ROE, attributing the current level to upfront acquisition costs and 1/n accounting impact.

Asked by Nidhesh Jain, Investec India

Bajaj Finserv Health's profitability timeline and milestones Direct
we are very clear in next-to-next financial year, we should break even. ... No, FY'28.

Provided a clear target year (FY28) for Bajaj Finserv Health to achieve break-even, offering a key financial milestone for investors to track.

Asked by Mayur Parkeria, Wealth Managers

Increase in Motor OD loss ratios for Bajaj General Direct
It's just a quarterly blip. This will come down by the year-end is what we believe. ... See what happens is in the beginning of the year, the OEMs increase their charges for our labor, spare parts. So, this happens like in most of the years, you will see this blip initially happening.

Management clarified the increase as a temporary blip due to OEM price hikes, with an expectation of normalization by year-end through corrective actions.

Asked by Nidhesh Jain, Investec India

3 min read 5 chapters

Detailed narrative

Consolidated Financial Performance and Accounting Updates

Bajaj Finserv reported a consolidated total income of INR 37,400 crores for Q2 FY26, marking an 11% year-on-year growth. The consolidated Profit After Tax (PAT) increased by 8% to INR 2,244 crores. Excluding the impact of mark-to-market (MTM) movements from insurance subsidiaries, PAT growth was a healthier 12%. The company also confirmed receiving necessary approvals for the acquisition of Allianz's stake in its insurance companies, which are now rebranded as Bajaj General Insurance Limited and Bajaj Life Insurance Limited, with the acquisition expected to conclude in the next few months. Financials for insurance companies are reported under Indian GAAP for standalone, and IndAS for consolidation.

Insurance Business Transformation and GST Impact

Bajaj Life Insurance demonstrated significant progress with its 'Bajaj Life 2.0' strategy, achieving a 50% YoY increase in Value of New Business (VNB) to INR 367 crores and expanding new business margins to 17.1% from 10.8% YoY. Retail protection grew 71%, contributing 8% to overall retail weighted received premium. However, Bajaj Life's PAT was significantly impacted by INR 112 crores due to GST regulations, specifically the loss of input tax credit, resulting in a PAT of INR 13 crores compared to INR 148 crores last year. Management expects to mitigate most of this GST impact over the next two quarters. Bajaj General Insurance saw GWP grow 9% to INR 6,413 crores (13.6% excluding 1/n impact), with PAT up 5% to INR 517 crores, despite higher acquisition costs and a combined ratio of 102.3% (101.4% excluding 1/n impact).

Robust Growth in Lending Businesses

Both Bajaj Finance and Bajaj Housing Finance delivered strong performances. Bajaj Finance reported a 24% YoY growth in AUM to INR 4,62,000 crores and a 23% increase in PAT to INR 4,948 crores. Net total income grew 20% to INR 13,170 crores. Despite elevated credit costs, particularly in the 2 & 3-wheeler and MSME segments, the company maintained a healthy capital adequacy of 21.22%. Bajaj Housing Finance also saw its AUM grow 24%, with Net Interest Income up 22% to INR 1,097 crores and PAT rising 18% to INR 643 crores. Asset quality remained strong with GNPA at 0.26% and NNPA at 0.12%.

Emerging Businesses Scale Up

Bajaj Finserv Health Limited significantly expanded its reach, recording 6.2 million health transactions in Q2 FY26, more than double the 2.4 million transactions from the previous year, and revenue from operations grew 22%. The company aims to break even by FY28. Bajaj Finserv Asset Management Company continued its rapid growth, with AUM reaching INR 28,815 crores as of September 30, 2025, and subsequently crossing INR 30,000 crores. This represents a 77% YoY growth, making it the fastest to achieve the INR 30,000 crore mark in under two years of operations, with 86% of AUM from non-group sources.

Strategic Outlook and Capital Management

Management reiterated its commitment to profitable growth and sustainable value creation across all businesses. For Bajaj Life, the focus remains on maintaining the improved product mix and achieving a term protection market share of around 10% in the medium term (2-3 years). The company is comfortable with its current capital position, with capital consumers primarily being the Health and AMC businesses. The ongoing regulatory developments, including IndAS and RBC, are expected to influence the long-term strategy for the insurance sector, with management planning to review future capital allocation decisions post the Allianz acquisition and regulatory clarity.

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