Bajaj Housing Finance Limited — Q4 FY26 earnings call

Call held 27 Apr 2026

Management summary

Bajaj Housing Finance reported a strong Q4 FY26 with robust AUM growth of 23% and normalized PAT growth of 20%. Operating efficiency significantly improved, and asset quality remained stable. However, NIM saw sequential compression due to lower acquisition yields and elevated money market rates, leading to higher credit costs primarily from prudential provisioning.

Highlights

  • AUM grew 23% YoY, crossing INR140,000 crores during the quarter.

  • Normalized PAT grew 20% YoY for Q4 FY26, excluding a one-time tax benefit of ~INR34 crores in Q4 FY25.

  • Opex to NTI improved to 19.2% in Q4 FY26 compared to 21.8% in Q4 FY25.

  • Asset quality remained stable with GNPA at 27 bps and NNPA at 11 bps.

  • Disbursements grew 23% YoY from INR14,250 crores to INR17,506 crores.

Concerns

  • Net Interest Margin (NIM) dropped by 12 bps sequentially from 4% in Q3 FY26 to 3.8% in Q4 FY26.

  • Annualized credit cost for the quarter was 19 bps, up from 11 bps in Q4 FY25, primarily due to prudential strengthening of provisioning coverage on Stage 2 assets.

  • Money market rates continue to be elevated, impacting the cost of new borrowings.

Key financials

2 periods

Headline

  • AUM
    ₹1.40L Cr
    YoY +23%
  • Normalized PAT Growth
    20%
  • Opex to NTI
    19.2%
  • GNPA
    27 bps
  • NNPA
    11 bps
  • Disbursements
    ₹17,506 Cr
    YoY +23%
  • Cost of Funds
    7.3%
  • Gross Spreads
    1.7%
  • NIM
    3.8%

Q4

  • Annualized Credit Cost
    19 bps
  • ROA
    2.3%
  • ROE
    12.2%

What they filed

Q1 FY27: revenue up 17.1%, net profit up 22.6% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue2,410 2,449 2,504 2,616 2,755 +14%2,884 +18%2,903 +16%3,063 +17%
Net profit546 548 587 583 643 +18%665 +21%669 +14%715 +23%
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

SegmentLAPLRD
AUM Mix10.8%22.4%
GNPA by Product46%0%

Capital allocation

high confidence
  • Liquidity Liquidity disclosed The company maintains comfortable capital adequacy position with CAR at 22.46% and PBC at 60.88%, both above regulatory thresholds.
    The company maintains comfortable capital adequacy position with CAR at 22.46% and PBC at 60.88%, both above regulatory thresholds.

Guidance & targets

AUM Growth

  • IHL AUM Growth AUM Growth · Ongoing · High confidence 21% to 23%
    So at a 9.5% IHL growth and if our ambition is to grow much faster than that, which we have put out at 21% to 23%, naturally the opportunity in the non-IHL will be better or higher...

    — Atul Jain

Disbursements

  • Sambhav Monthly Disbursement Disbursements · next 12 months · High confidence INR600 crores plus
    Sambhav loans now are acquiring in the in the range of INR410 crores to INR425 crores of average monthly disbursements during the quarter, the quarter gone by, and business is well on track to achieve INR600 crores plus of a monthly disbursement over next 12 months as we called out in the last update.

    — Atul Jain

Profitability

  • Medium Term ROA Profitability · Medium Term · High confidence 2 to 2.2%
    Your medium term guidance is 2 to 2.2.

    — Atul Jain

  • FY27 ROA Profitability · FY27 · Medium confidence upper end of the medium term range
    But we should be in the medium term range with a bias towards hitting the upper end of the medium term range in the ROA, which is our computation.

    — Atul Jain

Yields

  • Q1 FY27 Yields Yields · Q1 FY27 · Medium confidence slight compression
    So yields in quarter 1 there would be slight compression.

    — Gaurav Kalani

Cost of Funds

  • Q1 FY27 Cost of Funds Cost of Funds · Q1 FY27 · Medium confidence marginal benefit of 3 to 5 basis points
    while cost of funds side also we'll see some marginal benefit of 3 to 5 basis points.

    — Gaurav Kalani

  • Q1 FY27 Overall Cost of Funds Cost of Funds · Q1 FY27 · Medium confidence minor reduction / marginally sideways
    But still at an overall level we should see a minor reduction, sideways but a minor reduction towards a minor reduction in the cost of fund in the quarter 1 from quarter 4.

    — Atul Jain

Spreads

  • FY27 Spread Spreads · FY27 · Medium confidence compression
    Yes, spread compression but not resulting equally to ROA compression because partial offset through the loan loss and partial through opex efficiency there, but still ROA compression of around 10 bps.

    — Atul Jain

Growth Stance

  • Overall Growth Growth Stance · Ongoing · High confidence 2x of industry
    Yes, so loan growth Nischint, we would want to be significantly ahead the way we always want to grow 2x of industry, that is what we always stated and we want to grow and we want to continue there is no change in the growth stance of the company, we remain very comfortable with wherever the portfolios are there.

    — Atul Jain

What to watch in Q1 FY27

Q1 FY27 Overall Financial Assessment

Next quarter (with Q1 FY27 results)
Current Management deferred full FY27 assessment to Q1 FY27 results.
Target Full year assessment for FY27, including ROA, NIM, and credit cost guidance.

Why it matters

Management explicitly stated they would provide a clearer FY27 outlook after Q1 FY27 results due to market volatility, making this a key update point.

This year also we'll give a full assessment for the year in along with the quarter 1 call.

Risks & concerns

  • Competitive Intensity in Home Loan Market

    medium

    High competitive intensity in Q4 FY26 led to lower acquisition pricing and contributed to NIM compression. Management views this as a 'feature, not a novelty'.

    Management acknowledged

  • Policy Rate Volatility and Money Market Rates

    medium

    Elevated money market rates and uncertainty regarding policy rate changes impact the cost of funds and the ability to pass through rate changes, creating volatility for NIM. Management defers firm FY27 outlook due to this.

    Management acknowledged

  • Portfolio Attrition

    low

    Increased portfolio attrition, particularly from higher-rate books, contributes to yield reduction. However, BT-out rates are expected to stabilize or decline from May onwards.

    Management acknowledged

Q&A highlights

6 direct
Home Loan AUM % and BT-out trends Direct
IHL we ended at 50.45% because that's not home loan, there is a IHL definition, so which is a regulatory definition where we are required to be 50% of the total assets which includes the investments and the cash buffer what we hold. So that number is 50.45%... attrition is ~20%, BT-out would be 14% BT-out would be in the range of 10%.

Clarifies the regulatory definition of IHL vs. balance sheet home loan composition and provides specific figures for portfolio attrition and BT-out rates.

Asked by Shubhranshu Mishra

Drivers of NIM compression and Q1 FY27 outlook Direct
margin decline of a 12 bps is largely driven by lower acquisition price and also 15 bps of a pass-through what we had done in our PLR in December. So the full impact of that 15 bps of a pass-through... came in the current quarter. Also 25 bps pass-through on the repo side. ...yields in quarter 1 there would be slight compression. ...cost of funds side also we'll see some marginal benefit of 3 to 5 basis points.

Provides a detailed breakdown of the factors contributing to sequential NIM compression and offers a forward-looking view on yields and cost of funds for the next quarter.

Asked by Gaurav Khandelwal

Medium-term ROA guidance and FY27 outlook Partial
It should be towards the upper end of the medium term guidance may not beat that. Leverage doesn't have an impact on the ROA, it rather compresses ROA, but ROE it will improve to a certain extent. But we should be in the medium term range with a bias towards hitting the upper end of the medium term range in the ROA...

Management indicates a potential for FY27 ROA to be at the upper end of their guidance, but defers a firm assessment to Q1 FY27 results due to market volatility, highlighting the impact of leverage on ROA vs ROE.

Asked by Gaurav Khandelwal

NCD borrowing rates and cost of funds strategy Direct
in last month whatever we have borrowed a 3 year NCD, the coupon rate is 7.6. However, you match it with OIS because now then you convert fixed to floater, so the rate is much finer because the there is a OIS opportunity.

Reveals the current NCD borrowing cost and the company's strategy of using OIS to convert fixed-rate borrowings to floating, aiming for more competitive rates.

Asked by Raghav

PLR rate cuts and industry's ability to pass on rate hikes Direct
if there is no repo rate hike, I don't think... there is no cut scenario further in the PLR which is envisaged as of today. ...if there is a policy rate hike, it has never happened that there is no pass-through has happened. The pass-through may not be full, pass-through may be 10-15 bps instead of a 25 bps, but it is not a scenario where banks or anyone will not pass through when there is a policy rate hike.

Management clarifies that further PLR cuts are unlikely without a repo rate cut and expresses confidence in the industry's ability to pass on rate hikes, even if partially, to protect margins.

Asked by Viral Shah

Rationale for Stage 2 PCR increase and early delinquency trends Direct
in our portfolio in all the metrics, whether it's a first bounce or first 12-month bounce, early bounce... all the bounce metrics also are showing a downward trend. ...Purely from a prudence point of view from the current market current macro environment. No micro input has gone in this.

Confirms that the increase in Stage 2 provisioning coverage was a proactive, prudential measure driven by the macro environment, rather than any specific deterioration in the company's early delinquency metrics.

Asked by Viral Shah

Sambhav AUM size and mix Partial
So close to INR9,000 crores is the Sambhav AUM now roughly. The mix you asked for the mix of near prime and affordable. I have to do the mix. So I have to do the mix. I'll come back to you, Viral. Ravi will inform you later on. ...but roughly you should take 70-30, right, between affordable and near prime.

Provides the current AUM for the strategic Sambhav segment and an approximate mix, with a commitment to provide exact details later, which is crucial for assessing segment growth and risk.

Asked by Viral Shah

Competitive intensity in prime housing market Direct
we in the prime market, the market which we operate, it is the banks which set the rate. It is SBI and HDFC who are the rate setters. We are not the rate setters. So, we have to follow the market pricing what they are there. ...we consider irrational competitive activity as a feature, not as a novelty.

Highlights that the company operates as a price-taker in the prime housing market, following leading banks, and views competitive intensity as a permanent market characteristic rather than a temporary phase.

Asked by Abhijit Tibrewal

2 min read 6 chapters

Detailed narrative

Overall Performance Highlights

Bajaj Housing Finance reported a strong Q4 FY26, with Assets Under Management (AUM) growing 23% year-on-year, surpassing INR140,000 crores. Profit Before Tax (PBT) increased by 20%, and normalized Profit After Tax (PAT) also grew by 20% YoY, excluding a one-time tax benefit of approximately INR34 crores in Q4 FY25. Operating efficiency showed significant improvement, with the Opex to Net Total Income (NTI) ratio reducing to 19.2% in Q4 FY26 from 21.8% in Q4 FY25.

AUM Growth and Product Mix

The company's AUM growth for the year was at the higher end of its assessment range, reaching 23%. Disbursements on a year-on-year basis grew 23% from INR14,250 crores in Q4 FY25 to INR17,506 crores in Q4 FY26. The portfolio remains well-diversified, with home loans constituting 54.1% of AUM, Loan Against Property (LAP) at 10.8%, Lease Rental Discounting (LRD) at 22.4%, and Developer Finance (DF) at 11.5%.

NIM and Cost of Funds Dynamics

Net Interest Margin (NIM) experienced a sequential compression, dropping by 12 basis points from 4% in Q3 FY26 to 3.8% in Q4 FY26. This was primarily driven by a 14 bps reduction in portfolio yield due to lower acquisition pricing and portfolio attrition, partially offset by a 4 bps benefit from reduced cost of funds. The year-on-year cost of funds moderated by 60 bps to 7.3% in Q4 FY26 from 7.9% in Q4 FY25.

Asset Quality and Provisioning

Asset quality remained stable and healthy, with Gross Non-Performing Assets (GNPA) at 27 bps and Net Non-Performing Assets (NNPA) at 11 bps. The annualized credit cost for the quarter was 19 bps, an increase from 11 bps in Q4 FY25. Management clarified that this increase was a prudential strengthening of provisioning coverage on Stage 2 assets, undertaken due to the current macro environment, and not indicative of micro-level stress or rising early delinquencies within the portfolio.

Sambhav Housing Business Update

The Sambhav housing initiative, which focuses on the near prime and affordable segments, has grown its AUM to approximately INR9,000 crores. Monthly disbursements for this segment are currently in the range of INR410-425 crores, with a target to achieve INR600 crores plus monthly disbursements over the next 12 months. The business operates across 73 locations, primarily serving salaried customers with an average ticket size of INR28 lakhs and a high CIBIL score of greater than 750 for 65% of customers.

Competitive Landscape and Market Outlook

The prime housing market continues to exhibit high competitive intensity, with leading banks like SBI and HDFC setting the pricing benchmarks. Management views this competitive environment as a structural 'feature, not a novelty.' While Q1 FY27 may see slight yield compression and marginal cost of funds benefit, the overall FY27 outlook for ROA is expected to be at the upper end of the 2-2.2% medium-term guidance, contingent on policy rate stability and normalization of money market rates.

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