Bajaj Finance Q2 Results: Net Profit Jumps 23% to ₹4,948 Crore on Strong Loan Growth

Bajaj Finance Limited, India's leading non-banking financial company (NBFC), announced its consolidated financial results for the second quarter of the financial year 2025-26. The company reported a robust 23% year-on-year increase in its consolidated net profit, reaching ₹4,948 crore compared to ₹4,014 crore in the corresponding quarter of the previous year. This growth was primarily driven by a significant expansion in the loan book and a record number of new loan acquisitions.

Strong Revenue and Income Growth

The company's net interest income (NII) for Q2 FY26 witnessed a 22% increase, rising to ₹10,785 crore from ₹8,838 crore in Q2 FY25. The net total income also saw a healthy trajectory, growing by 20% to reach ₹13,170 crore. These figures reflect the company's ability to maintain healthy margins despite a competitive lending environment. The profit before tax (PBT) for the quarter stood at ₹6,608 crore, marking a 22% growth over the ₹5,401 crore reported in the same period last year.

Record Operational Milestones

Bajaj Finance achieved significant operational milestones during the July-September 2025 period. The number of new loans booked during the quarter grew by 26% to 12.17 million, up from 9.69 million in the previous year. This surge in loan bookings contributed to a 24% growth in consolidated Assets Under Management (AUM), which stood at ₹462,261 crore as of September 30, 2025, compared to ₹373,924 crore a year ago. The customer franchise also expanded significantly, reaching 110.64 million, a 20% growth year-on-year.

Asset Quality and Provisions

While the company maintained a strong growth profile, there was a slight uptick in non-performing assets. The Gross Non-Performing Assets (GNPA) ratio stood at 1.24% as of September 30, 2025, compared to 1.06% in the previous year. Similarly, the Net NPA ratio was reported at 0.60%, up from 0.46% year-on-year. Loan losses and provisions for the quarter increased by 19% to ₹2,269 crore. The company maintains a provisioning coverage ratio of 52% on its stage 3 assets, indicating a prudent approach to risk management.

Performance of Subsidiaries

The consolidated results include the performance of its key subsidiaries, Bajaj Housing Finance Limited (BHFL) and Bajaj Financial Securities Limited. Bajaj Housing Finance reported a 21% growth in net profit for Q2 FY25, reaching ₹546 crore. Its AUM grew by 26%, supported by steady demand in the mortgage segment. Bajaj Financial Securities also contributed to the overall growth, with its margin trade financing (MTF) book growing by 18% year-on-year.

Financial Summary Table

Efficiency and Capital Adequacy

Bajaj Finance continues to demonstrate operational efficiency, with the operating expenses to net total income ratio improving to 32.6% in Q2 FY26, down from 33.2% in Q2 FY25. The company's capital position remains strong, with a Capital Adequacy Ratio (CRAR) of 21.23% as of September 30, 2025. Tier-I capital stood at 20.54%, well above the regulatory requirements, providing a solid foundation for future growth.

Segmental Performance and Market Impact

The company's diversified portfolio saw growth across various segments. While the urban B2C and SME lending segments remained resilient, the rural B2C segment faced some challenges due to elevated loan losses. However, the commercial lending and mortgage segments (via BHFL) provided significant support to the overall AUM. The company's digital platforms continue to mature, contributing a substantial portion of new business acquisitions.

Asset Quality Comparison

Market Analysis

Analysts noted that while the profit growth was robust, the slight increase in NPAs and credit costs reflects the broader stress in the unsecured lending market. However, the company's ability to grow its AUM at 24% and maintain a high ROA suggests that its business model remains effective. The management's focus on diversifying into secured lending and gold loans is expected to mitigate some of the risks associated with unsecured portfolios in the coming quarters.

Conclusion

Bajaj Finance has delivered a strong set of numbers for the second quarter of FY26, characterized by high volume growth and steady profitability. Despite minor headwinds in asset quality, the company's massive customer franchise and strong capital base position it well for the remainder of the financial year. Investors will be watching for the impact of potential interest rate changes and the company's progress in its digital transformation initiatives as it moves toward the next half of the fiscal year.