Bajaj Finance Limited — Q4 FY26 earnings call

Call held 29 Apr 2026

Management summary

Bajaj Finance delivered a strong Q4 FY26, marked by AUM crossing INR 5 lakh crores and robust PAT growth. The company is heavily investing in AI transformation to enhance efficiency and customer experience, with significant rollouts planned for FY27. While some segments like MSME saw muted growth, management anticipates a rebound and expects continued strong performance, focusing on balance sheet resilience and maintaining profitability metrics amidst a dynamic environment.

Highlights

  • AUM grew 22.4% YoY to INR 510,000 crores, crossing the INR 5 lakh crore milestone.

  • PAT grew 26.7% YoY in Q4 FY26, with core profitability (PBT) up 26%.

  • Booked 12.9 million loans and added 3.93 million new customers in Q4, reaching a total customer franchise of 119.3 million.

  • Gold loan portfolio showed strong momentum, growing 115% and contributing 3.5% to overall AUM.

  • Provision coverage ratio improved to 60% from 54% last year, with GNPA at 1.01% and NNPA at 41 basis points.

Concerns

  • MSME growth remained muted at 6% for the full year due to proactive risk actions.

  • Marginal NIM moderation is expected in FY27, contingent on interest rates and geopolitical tensions.

  • Sequential increase in Opex to NTI in Q4 due to new Labour Code and accelerated gold loan branch expansion.

Key financials

2 periods

Headline

  • AUM
    ₹5.10L Cr
    YoY +22.4%
  • PAT Growth
    26.7%
    YoY +26.7%
  • Customer Franchise
    119.3 Mn
  • Gold Loan Portfolio Growth
    1.1%
    YoY +115%
  • Deposit Book
    ₹68,533 Cr
  • Opex to NTI (new metric)
    33.8%
  • Loan Loss to Avg AR (new metric)
    1.6%
  • GNPA
    1%
  • NNPA
    0.41%
  • Provision Coverage Ratio
    60%

Q4

  • Loans Booked
    12.9 Mn
  • New Customers Added
    3.93 Mn
  • Cost of Funds
    7.4%
  • ROA
    4.6%
  • ROE
    20%

What they filed

Q1 FY27: revenue up 18.6%, net profit up 29.3% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue14,488 15,371 15,638 16,697 17,184 +19%17,870 +16%18,430 +18%19,802 +19%
Net profit5,614 3,706 3,940 4,133 4,251 −24%4,581 +24%4,840 +23%5,346 +29%
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

  • Gold Loan Portfolio
    115% Growth3.5% Contribution to AUM
  • MSME
    6% Growth (Full Year)
  • Captive 2-wheeler and 3-wheeler business
    1% Contribution to AUM13% Contribution to GNPA5% Contribution to Credit Cost
  • Bajaj Housing Finance Limited (BHFL)
    23% Disbursements/AUM Growth37% Loan Approvals Growth19.2% Opex to NTI20% PBT Growth (Q4)20% PAT Growth (Q4, ex-one-timers)
  • Bajaj Financial Securities Limited (BFSL)
    77% AUM Growth50% Profits Growth1,24,000 New Customers Added (Q4)10.5% ROE

Capital allocation

high confidence
  • Dividend ₹6/share (final)
    Just on the previous year gone by, the Board of Directors have recommended a dividend to shareholders of INR 6 per equity share.

Guidance & targets

AUM

  • AUM Growth AUM · FY27 · High confidence 20% to 24%
    In terms of AUM, we're confident of a 20% to 24% AUM growth, aided by new businesses that we've launched in the last few years as they begin to scale.

    — Rajeev Jain

Customer Franchise

  • New Customers Added Customer Franchise · FY27 · High confidence 15 - 17 million
    In terms of customer franchise, we continue to be confident of adding 15 - 17 million new customers in FY27.

    — Rajeev Jain

Profitability

  • ROA Profitability · FY27 · High confidence 4.4% to 4.6%
    ROA came in as of fourth quarter at 4.6%. We continue to guide for 4.4% to 4.6%.

    — Rajeev Jain

  • ROE Profitability · FY27 · High confidence 19% to 20%
    Return on equity came in at 20% in the current quarter, we continue to guide for 19% to 20%.

    — Rajeev Jain

Credit Cost

  • Credit Cost to AUM (new metric) Credit Cost · Full year FY27 · High confidence 145 to 160 bps

    Previously 165 bps → 145 to 160 bps

    And against that, you're guiding for 145 to 160 bps next year, full year. Is that the right understanding? Yes, that is perfect, right?

    — Rajeev Jain

Operating Efficiency

  • Opex to NTI Operating Efficiency · FY27 · High confidence 25 to 40 basis points improvement
    On opex to NTI, we expect to see continued improvement of 25 to 40 basis points from current levels.

    — Rajeev Jain

NIM

  • NIM NIM · FY27 · Medium confidence Marginal moderation
    NIM, we expect marginal moderation. It's a little bit contingent on how interest rates play out, caused by geopolitical tensions.

    — Rajeev Jain

Segmental Growth

  • Gold Loan Portfolio Contribution to AUM Segmental Growth · FY27 · High confidence cross 5-odd percent

    From 3.5% today

    The business now contributes to 3.5% overall AUM. We foresee gold loan portfolio to probably cross 5-odd percent of total AUM by FY'27.

    — Rajeev Jain

  • MSME Growth Segmental Growth · between Q2 and Q3 of FY27 · Medium confidence double-digit growth

    From 6% today

    MSME continue to see muted growth. It grew by 6% only on account of a set of proactive risk actions that we have been taking since Q2 FY'26. We expect that it should come back to double-digit growth or the company growth momentum between Q2 and Q3 of FY'27.

    — Rajeev Jain

Asset Quality

  • GNPA and NNPA Asset Quality · FY27 · High confidence remain range bound
    And GNPA and NNPA, we expect them to remain range bound and well within our long-term guidance.

    — Rajeev Jain

AI Transformation

  • AI Talent Resources AI Transformation · by June '27 · High confidence 363-odd resources

    From 203 today

    We are expanding that to 363-odd resources by June'27.

    — Rajeev Jain

  • Customer Engagement BOT Interface AI Transformation · by June '26 · High confidence all customer engagement into BOT interface
    all customer engagement is going into BOT interface by June'26.

    — Rajeev Jain

  • Communication AI BOT AI Transformation · by June '26 · High confidence all communication will have a text AI BOT
    By June'26, any communication across any channel by us as a firm, whether for sales, service, DMS would have a text Al BOT in it.

    — Rajeev Jain

Loans Booked

  • Monthly Loans Booked Loans Booked · current month · High confidence 5 million-plus

    From 4.6 million today

    it's very likely we'll cross 5 million-plus loans in the month. Our last peak was 4.6-odd million loans, and that was in festival period.

    — Rajeev Jain

Strategic

  • Market Share vs System Growth Strategic · 5-7 years · Medium confidence grow 2x system growth
    We should largely be growing 2x. I would say, given our relative market share, not our absolute size, given our relative market share, we should be as a firm aspiring to grow 2x of what the system growth is so that we can meet our ambition to be among the top 5, 6 financial services lenders in this country over a period of next 5 to 7 years' time.

    — Rajeev Jain

What to watch in Q1 FY27

MSME Growth Rebound

Between Q2 and Q3 of FY27
Current 6% growth (full year FY26)
Target Double-digit growth

Why it matters

Indicates recovery in a key business segment and overall AUM growth momentum.

MSME continue to see muted growth. It grew by 6% only on account of a set of proactive risk actions that we have been taking since Q2 FY'26. We expect that it should come back to double-digit growth or the company growth momentum between Q2 and Q3 of FY'27.

Risks & concerns

  • Geopolitical Tensions and Macro Stability

    medium

    FY27 assessment is contingent on expectations of easing geopolitical tensions and macro stability, which could impact NIM and overall outlook.

    Management acknowledged

  • Muted MSME Growth

    low

    MSME growth was 6% in FY26 due to proactive risk actions, but is expected to return to double-digit growth by Q2-Q3 FY27.

    Management acknowledged

  • Captive 2-wheeler and 3-wheeler business wind-down

    low

    This segment, contributing to GNPA and credit cost, will wind down to less than INR 1,500 crores by September '26, leading to improved asset quality.

    Management acknowledged

  • Marginal NIM Moderation

    low

    NIM is expected to see marginal moderation in FY27, influenced by interest rates and geopolitical factors.

    Management acknowledged

Q&A highlights

5 direct
Credit Cost Guidance for FY27 Direct
And against that, you're guiding for 145 to 160 bps next year, full year. Is that the right understanding? Yes, that is perfect, right? ... I'm also making a point that we have tailwinds on credit cost. We don't have headwinds. So that itself is a big help.

Clarified the new credit cost guidance (145-160 bps) for FY27, confirming it's a reduction from Q4 FY26 and assumes stable geopolitical conditions, with management emphasizing tailwinds.

Asked by Abhishek Murarka

ROA Guidance and NIM Expansion Direct
See, the answer is to the second part is, no. ... We orchestrate these 4 to deliver an outcome of 4.3% to 4.7% ROA and 20% to 22% ROE to investors on a long-term basis.

Management clarified that NIM expansion is not necessarily required to achieve the FY27 ROA guidance, as they manage ROA through a combination of growth, margin, cost, and credit cost levers.

Asked by Shreya Shivani

AUM Growth Drivers and Segmental Performance Partial
one, the captive 2-wheeler 3-wheeler financing business has seen an attrition of 60%. That's almost INR6,500 crores of attrition... Second, MSME, the growth used to be 25%, 28%, 30%, has been brought down to 6%. These 2 business... should start to come back into some growth momentum to double-digit number from second half onwards.

Provided detailed insights into the factors impacting current AUM growth (captive 2W/3W attrition, MSME slowdown) and the expected drivers for future growth (MSME rebound, gold loan expansion).

Asked by Kunal Shah

AI Investment and P&L Impact Partial
As I said, SMS or bots being the simplest example. Walking into 3,000 stores or 2,700 across branch gold loan branches, customer service branches and in-stores, we will deploy close to 2,700 cameras, customer identification, reduce friction, which means faster turnaround, which means lower cost.

Management explained the tangible benefits and cost savings from AI investments, such as reduced friction in customer processes and lower operational costs (e.g., AI call agents being 1/3rd the cost), despite not disclosing specific capex figures.

Asked by Kuntal Shah

PCR Levels and Credit Cost Presentation Change Direct
So I think your assessment is correct versus 165 to 175 that Rajeev that becomes 145 to 170 because of the change in the presentation. Your assessment is correct on that. As regard the ECL provisioning across Stage 1, Stage 2, Stage 3, this is a bottoms-up exercise that we do every year.

Confirmed that the change in credit cost figures was due to a presentation change and clarified the company's approach to provisioning for balance sheet resiliency.

Asked by Viral Shah

Profit Growth vs AUM Growth for FY27 Partial
As regard the profit growth for the next year, 22% to 24% growth in AUM should lead to a little better growth in profitability because if we are supposed to deliver... I don't think that I've done a math internally which suggests a 35% number to me, but I'll be more than happy to be positively surprised if the number were to come.

Management indicated that profit growth would be 'a little better' than AUM growth (22-24%) but did not confirm the analyst's higher projection of 35-40%, suggesting a more conservative internal outlook.

Asked by Shubhranshu Mishra

Long-term Growth Ambition Direct
I think the long-term guidance that we give at this point in time is between 22% and 24%, 25% kind of corridor. ... We should largely be growing 2x. I would say, given our relative market share... we should be as a firm aspiring to grow 2x of what the system growth is so that we can meet our ambition to be among the top 5, 6 financial services lenders in this country over a period of next 5 to 7 years' time.

Reiterated the long-term growth corridor and articulated the strategic ambition to grow at twice the system rate to become a top 5-6 financial services lender in India.

Asked by Omkar

Post-COVID ROE Trajectory and AI Impact Direct
Okay, your observation is correct. I think first point. Point number two, I think pre-COVID to now, Bharat, company is 4x, INR140,000 crores balance sheet, 3.5x. We are INR510,000 crores. ... We are, Sandeep made a point on bullet proofing the balance sheet. We will be a bulletproof business. While delivering as a firm a 20%, 22% ROE and a 22% to 24% balance sheet growth.

Acknowledged the analyst's observation on undulating ROE post-COVID, highlighting significant balance sheet growth and the current focus on resilience and bulletproofing the business while maintaining strong ROE and AUM growth targets.

Asked by Bharat Shah

2 min read 6 chapters

Detailed narrative

Robust Q4 FY26 Financial Performance

Bajaj Finance reported a strong Q4 FY26, with Assets Under Management (AUM) growing 22.4% year-on-year to reach INR 510,000 crores, surpassing the INR 5 lakh crore milestone. Profit After Tax (PAT) for the quarter increased by 26.7% year-on-year. The company booked 12.9 million loans and added 3.93 million new customers, expanding its total customer franchise to 119.3 million as of March FY26.

Asset Quality and Provisioning Strategy

The company maintained healthy asset quality with a Gross Non-Performing Asset (GNPA) ratio of 1.01% and a Net Non-Performing Asset (NNPA) ratio of 41 basis points. The provision coverage ratio improved to 60% from 54% in the prior year. An additional ECL provision of INR 142 crores was made, and the loan loss to average AR, under a revised reporting methodology, stood at 1.65%, which is expected to trend down in FY27.

Accelerated AI Transformation (FinAl)

Bajaj Finance is aggressively pursuing its FinAl transformation, with 203 dedicated AI personnel, projected to expand to 363 by June '27. This initiative aims to integrate AI across all aspects of the business, including customer engagement, sales, service, and operations. Key milestones include 100% AI BOT interface for customer engagement and AI BOT integration into all communications by June '26, expected to drive significant efficiency gains and enhance customer experience.

Segmental Growth and Outlook

The gold loan portfolio demonstrated exceptional growth of 115% in FY26, now contributing 3.5% to the overall AUM, with expectations to exceed 5% by FY27. The MSME segment, which grew a muted 6% in FY26 due to proactive risk actions, is anticipated to return to double-digit growth between Q2 and Q3 of FY27. The captive 2-wheeler and 3-wheeler business, currently less than 1% of AUM, is expected to wind down to under INR 1,500 crores by September '26, which will further improve asset quality.

FY27 Guidance and Strategic Vision

For FY27, the company guides for 20-24% AUM growth and 15-17 million new customer additions, contingent on stable geopolitical and macroeconomic conditions. Marginal NIM moderation is expected, while Opex to NTI is projected to improve by 25-40 basis points. The company aims for an ROA of 4.4-4.6% and an ROE of 19-20%, with credit costs expected to trend down to 145-160 bps. The long-term ambition is to grow at twice the system rate to become a top 5-6 financial services lender in India within 5-7 years.

Shareholder Returns and Operational Efficiency

The Board recommended a final dividend of INR 6 per equity share for FY26, consistent with previous years. Operational efficiency saw an improvement in Opex to NTI by 10 basis points year-on-year (using the old metric), reaching 33.2%. The cost of funds improved by 4 basis points in Q4 to 7.41%, and the deposit book grew to INR 68,533 crores, contributing 16% to consolidated borrowings.

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