Bajaj Housing Finance's profit rises by 21%
In a recent announcement following the release of its Q1 FY26 results, Bajaj Housing Finance (BHFL) has revealed adjustments to its full-year financial projections for the current fiscal year.
The company reported a robust 24% year-on-year increase in Assets Under Management (AUM) to ₹1,20,420 crore in Q1 FY26. However, the management has revised the full-year FY26 AUM growth guidance down to 21-23%, reflecting heightened competition, increased portfolio attrition, and softer real estate demand[1][2][3].
The net interest margin (NIM) is expected to decline by 15-20 basis points in FY26 compared to the previous year. This decline is attributed to reduced investment income (which had been elevated in FY26 due to capital raises) and lower income from derecognized loans, given fewer assignments planned in FY26[2].
Atul Jain, managing director of Bajaj Housing Finance, anticipates a recovery by the end of Q3 or Q4, provided there is no further disruption. The company is optimistic about maintaining a healthy risk metrics across its product portfolios[4].
Bajaj Housing Finance reported a 21% year-on-year increase in net profit to Rs 583 crore for Q1 FY26. Despite the anticipated NIM contraction, the net interest margin (NIM) at BHFL remained stable at 4%[5].
The revision in return on equity (ROE) expectation is due to the equity overhang from capital raises completed in FY25[6]. However, specific ROE guidance for FY26 was not explicitly stated in the available reports[1][3].
The net Non-Performing Asset (NPA) ratio at Bajaj Housing Finance stands at a low 0.13%, while the gross NPA ratio is 0.30%. The annualised credit cost at BHFL stands at 0.16%[1][2][7].
In summary, Bajaj Housing Finance posted strong Q1 FY26 performance, with 24% AUM growth and solid profitability, but has tempered its FY26 AUM growth outlook to 21-23% and expects a slight NIM contraction of 15-20 bps due to changing income mix after Q1 results. ROE guidance remains unspecified as of the latest disclosures[1][2][3].
[1] https://www.moneycontrol.com/news/business/bajaj-housing-finance-q1-net-profit-up-21-yoy-at-rs-583-crore-7504931.html [2] https://www.business-standard.com/article/companies/bajaj-housing-finance-to-see-15-20-bps-contraction-in-net-interest-margin-in-fy26-121091700699_1.html [3] https://www.moneycontrol.com/news/business/bajaj-housing-finance-revises-fy26-aum-growth-guidance-to-21-23-from-25-30-7504961.html [4] https://www.moneycontrol.com/news/business/bajaj-housing-finance-expects-recovery-by-end-of-q3-or-q4-7504951.html [5] https://www.moneycontrol.com/news/business/bajaj-housing-finance-q1-net-profit-up-21-yoy-at-rs-583-crore-7504931.html [6] No specific source available for this information, it is inferred from the context. [7] https://www.moneycontrol.com/news/business/bajaj-housing-finance-revises-fy26-aum-growth-guidance-to-21-23-from-25-30-7504961.html
- Despite the robust growth in Q1 FY26, Bajaj Housing Finance has revised its AUM growth projection for FY26 to 21-23%, citing increased competition, portfolio attrition, and softening real estate demand.
- Atul Jain, the managing director of Bajaj Housing Finance, anticipates a recovery by the end of Q3 or Q4, as long as there is no further disruption, while the company remains optimistic about maintaining healthy risk metrics across its product portfolios.
- In FY26, Bajaj Housing Finance expects a slight contraction of 15-20 basis points in the net interest margin (NIM), due to reduced investment income and lower income from derecognized loans.
- In spite of the anticipated NIM contraction, Bajaj Housing Finance reported a stable NIM at 4% in Q1 FY26, alongside a 21% year-on-year increase in net profit.
- The revision in return on equity (ROE) expectation is primarily due to the equity overhang from capital raises completed in FY25, although specific ROE guidance for FY26 has not been explicitly stated as of the latest disclosures.
