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    Bajaj Finance Limited

    BAJFINANCE
    Financial Services·3 Feb 2026
    Management Summary

    Bajaj Finance reported a strong Q3 FY26, marked by robust core operating performance and strategic proactive measures. The company saw significant AUM and profit growth, alongside improvements in asset quality and operational efficiency. Management emphasized a permanent strengthening of its provisioning framework and continued investment in AI transformation, while also providing clear guidance on future growth and profitability metrics.

    Highlights

    9

    • Core operating AUM grew 22% YoY, with an absolute increase of INR 23,622 crores.

    • Core profit and PAT both registered a 23% YoY growth.

    • Core operating ROE stood at 19.6%, and core ROA at 4.6%.

    • Net NPA remained healthy at 47 basis points.

    • A one-time accelerated ECL provision of INR 1,406 crores was taken, increasing Stage 1 PCR from 74 bps to 98 bps.

    • An exceptional charge of INR 265 crores was recorded due to the new labor code, with an expected annualized impact of INR 100-125 crores.

    • A gain of INR 1,416 crores from the sale of BHFL shares was recognized as an exceptional item.

    • New loans booked increased by 15% YoY to a record 14 million, and the customer franchise reached 115 million.

    • Opex to NTI improved to 32.8%, and core loan losses and provisions grew 9% YoY to INR 2,043 crores, with an annualized rate of 1.91%.

    What Changed3

    vs Q4 FY26

    Guidance items15 → 24 (+9)Risks discussed4 → 0 (-4)Q&A highlights8 → 0 (-8)

    Guidance & targets

    24
    CategoryTargetPriority
    Other
    Annualized impact of new labor code
    INR 100 crores to INR 125 crores
    		High
    Other
    New Consumer AI platform launch
    Launched
    		High
    Other
    Hunting vs Farming mix
    Shift from 60-40 to 40-60
    		High
    Other
    Calls AI will listen to
    100 million calls
    		High
    Other
    All products with AI text BOTs live
    All 26 products
    		High
    Other
    Auto quality check of documents accuracy
    85-90%
    		High
    Other
    AI summaries on app and web
    Start to emerge
    		High
    Volume
    Overall full year AUM growth
    22-23%, more likely 22%
    		High
    Volume
    MSME business growth
    Back to 20s growth
    		Medium
    Volume
    MSME business growth
    Back to 20s growth
    		Medium
    Volume
    New car financing growth
    Early 30s
    		Medium
    Volume
    Used car growth
    Slowly in H1, better in H2
    		Medium
    Volume
    CV and tractor growth
    30%, 35%, 40%
    		Medium
    Volume
    Annual loans
    100 million
    		High
    Revenue
    Fee and commission line item growth
    17-20% Y-o-Y
    		High
    Profitability
    Credit costs (annualized)
    165 to 175 basis points
    		High
    Profitability
    Loss Given Default (LGD) floor
    80% (for some businesses), 40-50% (for secured)
    		High
    Profitability
    Cost of funds
    7.55% to 7.60%
    		High
    Profitability
    AF portfolio credit cost
    Down to INR 1,700 crores
    		High
    Profitability
    AF portfolio credit cost
    INR 4,200 crores
    		High
    Market Share
    Total customer franchise
    200 million
    		High
    Market Share
    Active households in India
    20%
    		High
    Market Share
    Total customer franchise
    Cross 120 million
    		High
    Headcount
    Number of autonomous agents
    800+
    		High
    2 min read

    Detailed Narrative

    Bajaj Finance reported a robust Q3 FY26, showcasing strong core operating performance despite one-time📎 charges. Core operating AUM grew by INR 23,622 crores, marking a 22% year-on-year increase. Both core profit and PAT saw a healthy 23% growth. The company maintained a strong asset quality with Net NPA at 47 basis points, and core operating ROE stood at 19.6% with ROA at 4.6%. Operating expenses to Net Interest Income (Opex to NTI) improved to 32.8%, reflecting enhanced efficiency. New loans booked reached a record 14 million, a 15% increase, and the customer franchise expanded by 4.76 million, reaching 115 million.

    Key strategic actions included a proactive strengthening of the provisioning framework, with a one-time📎 accelerated ECL provision of INR 1,406 crores, elevating Stage 1 PCR from 74 bps to 98 bps. This measure is a permanent change aimed at bulletproofing the balance sheet. Additionally, a one-time📎 exceptional charge📎 of INR 265 crores was incurred due to the new labor code, with an anticipated annualized impact of INR 100-125 crores in subsequent years. An exceptional gain📎 of INR 1,416 crores from the sale of BHFL shares was also recognized.

    Management provided optimistic guidance for FY26, expecting overall full-year AUM growth to be around 22-23%, with cost of funds projected to be between 7.55% and 7.60% by year-end. For FY27, credit costs are anticipated to be in the range of 165-175 basis points. The company is heavily investing in AI transformation, with plans to launch a new Consumer AI platform by May-June '27, listen to 100 million calls next year, and have all 26 products live with AI text BOTs by April-May '26. They also aim for 85-90% accuracy in auto quality checks of documents within 15 months and to deploy over 800 autonomous agents in the next fiscal.

    Looking further ahead, Bajaj Finance targets a 200 million customer base in the next 3-4 years and 100 million annual loans by FY30, representing 20% of active Indian households. The company also plans to shift its hunting-to-farming customer acquisition mix from 60-40 to 40-60 over the next 3-4 years, emphasizing deeper engagement with existing customers. While acknowledging a volatile global economic environment, management expressed high confidence in their proactive strategies and the firm's resilience, ensuring sustainable growth and profitability.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.