Bajaj Finance Q4 FY26: AUM crosses ₹5 lakh crore as profit and asset quality strengthen

Bajaj Finance ended Q4 FY26 with a milestone that signals both scale and consistency. Consolidated assets under management rose 22 percent year on year to ₹509,975 crore, crossing ₹5 lakh crore for the first time. The quarter also delivered higher profitability and steady operating discipline. Profit before tax before one-time actions and the presentation change grew 26 percent to ₹7,552 crore, while profit after tax pre minority interest grew 27 percent to ₹5,660 crore.

The underlying engine stayed broad-based. The company booked 12.89 million new loans in the quarter, up 20 percent year on year, and added 3.93 million customers. Total customer franchise reached 119.33 million. Management also highlighted continued improvement in vintage performance across 3 MOB, 6 MOB and 9 MOB, reinforcing the view that the risk tightening seen earlier in parts of MSME is now flowing through to credit costs.

Two accounting items matter for comparability. First, Q4 FY26 included an additional ECL provision of ₹142 crore toward management and macro overlays. Second, recoveries against written off loans were reclassified from other operating income to loan losses and provisions across all periods. This presentation change reduces reported net total income and loan losses and provisions, but does not change profit.

Scale with control: what the consolidated numbers say

On a like for like basis after one-time actions and the presentation change, consolidated net interest income grew 20 percent to ₹11,781 crore in Q4 FY26. Net total income rose 21 percent to ₹14,209 crore. Pre-provisioning operating profit expanded 21 percent to ₹9,408 crore. Profit before tax was ₹7,410 crore, up 31 percent, and profit after tax was ₹5,553 crore, up 22 percent.

Operating costs moved largely in line with income. Operating expenses increased 22 percent to ₹4,801 crore, and opex to net total income stood at 33.8 percent versus 33.6 percent in Q4 FY25. Management attributed the sequential increase to the cascading impact of the New Labour Codes and accelerated gold loan branch expansion, while also noting that AI implementation is supporting operating efficiencies.

Credit metrics remained within long-term guardrails. As of 31 March 2026, consolidated GNPA was 1.01 percent and NNPA was 0.41 percent. Provisioning coverage on stage 3 assets improved to 60 percent from 54 percent a year earlier. Loan loss to average AUF in Q4 FY26 was 1.65 percent after the changes, compared with 2.17 percent in Q4 FY25. The company also reported a net decrease of ₹430 crore in stage 2 and stage 3 assets during the quarter, with stage 3 declining by ₹761 crore.

Capital stayed comfortable. Consolidated capital adequacy was 21.55 percent with tier 1 at 20.67 percent as of 31 March 2026. Liquidity buffer was ₹15,020 crore, and the daily average LCR for Q4 was 228 percent against the 100 percent regulatory requirement.

Where growth came from: segments and subsidiaries

The group’s AUM growth remained diversified across consumer, rural, MSME, commercial, and mortgages. Mortgages are now the single largest pool at ₹162,077 crore, up 25 percent year on year and representing 31.8 percent of consolidated AUM. Within mortgages, lease rental discounting rose 42 percent to ₹32,207 crore, while loan against property rose 36 percent to ₹36,442 crore. Home loans grew 18 percent to ₹77,202 crore.

Gold loans were the other standout for growth. The gold loan book more than doubled to ₹17,831 crore, up 115 percent year on year. The company also expanded its footprint aggressively in this category, adding 138 gold loan branches in Q4 to reach 1,507 branches.

MSME lending grew 6 percent to ₹51,570 crore, with management explicitly linking the slower growth to risk first actions in MSME businesses. This is a useful signal for investors because it frames the growth trade-off: moderation in one segment was chosen to protect credit outcomes.

Bajaj Housing Finance delivered a clean quarter on growth and operating leverage. AUM rose 23 percent to ₹140,706 crore. Net total income grew 20 percent to ₹1,141 crore, while opex to net total income improved to 19.2 percent from 21.8 percent. Profit before tax increased 20 percent to ₹866 crore and profit after tax was ₹669 crore. Asset quality stayed stable with GNPA at 0.27 percent and NNPA at 0.11 percent.

Bajaj Financial Securities continued scaling from a smaller base. AUM rose 77 percent to ₹7,984 crore. Net total income grew 47 percent to ₹157 crore and profit after tax rose 50 percent to ₹54 crore. Its customer franchise reached 1.38 million as of 31 March 2026.

FINAI in the background: technology as operating leverage

The presentation places FINAI at the center of the next phase of Bajaj Finance’s execution model. It is positioned less as a single product and more as a process layer across sourcing, onboarding, servicing, collections, and internal productivity.

In Q4 FY26, the company reported 203 dedicated employees in its AI unit, up from 145 in Q3 FY26. Voice to data conversion rose to 31 million customer interactions in the quarter, and face recognition cameras were deployed in 60 stores. Customer engagement automation also expanded, with 10 AI voice bots and 17 AI text bots live as of Q4.

The operational metrics are early but directional. DIY customer servicing via AI voice and text bots reached 72 percent in Q4, up from 69 percent in Q3. In debt management services, receipts through AI text bots moved from zero in Q3 to 6,632 in Q4.

Management’s FY27 plan is to move from pilots to scale. The company plans to deploy AI enabled experiences across app and website covering business and service journeys through FY27, enable discovery across AI platforms such as ChatGPT and Gemini, and scale agentic AI from 27 agents to 800 plus autonomous agents across sales, operations, debt management services, HR, IT, and risk. An AI governance framework aligned with RBI’s FREE-AI policy has already been completed in Q4 FY26.

The practical investor question is how quickly this translates into measurable margin and cost outcomes. Management has already cited AI as a driver of operating efficiencies while acknowledging near-term pressures from labour code impacts and branch expansion. If the company can keep opex to net total income trending down by 25 to 40 basis points in FY27 as guided, FINAI’s role will become more visible in reported ratios.

FY26 in one frame: growth, guardrails, and a more optimistic FY27 corridor

For the full year FY26 before one-time actions and presentation change, the consolidated franchise delivered what the management calls a strong year across volume, AUM, customer additions, operating efficiencies, and profitability. AUM grew 22 percent to ₹509,975 crore. Net total income rose 21 percent to ₹53,324 crore after the presentation change. Profit before tax before one-time actions was ₹27,630 crore, up 23 percent, and profit after tax pre minority interest was ₹20,689 crore, up 24 percent. The company also crossed 50 million new loans booked in a year, reaching 52.45 million.

Management’s FY26 scorecard gives a clear picture of where execution exceeded expectations and where it did not. Customer additions were 17.51 million against a 14 to 16 million assessment. AUM growth at 22 percent was below the 24 to 25 percent assessment, attributed to risk first actions in MSME. Credit cost landed within the 1.85 to 1.95 percent corridor at 1.93 percent before one-time actions and the presentation change. GNPA and NNPA finished at 1.01 percent and 0.41 percent, within long-term guidance.

For FY27, the company’s assessment assumes easing geopolitical tensions and macro stability. It expects AUM growth of 22 to 24 percent, marginal moderation in NIM, non-interest income growth of 16 to 18 percent, and opex to net total income improvement of 25 to 40 basis points from current levels. Credit cost is expected to fall meaningfully, with net loan loss to average AUF guided in the 1.45 to 1.60 percent corridor. ROA is expected at 4.4 to 4.6 percent, while ROE is expected at 19 to 20 percent given excess capital.

Investor takeaways

Q4 FY26 reads as a quarter of scale plus stability. The ₹5 lakh crore AUM milestone came with strong customer additions, solid profit growth, and improving credit cost. The headline ratios stayed within the company’s long-term guidance bands, and provisioning coverage on stage 3 improved.

The second message is one of deliberate portfolio choices. MSME growth was slower, but management framed that as a risk first decision that helped improve credit outcomes. In contrast, mortgages and gold loans expanded faster, supported by distribution build-out and a broader product mix.

The third message is that FY27 is being positioned as a year where the underlying credit cycle improves and AI driven operating leverage starts to matter more. If the company can deliver lower credit costs while holding growth in the 22 to 24 percent corridor, the profit outlook should stay constructive even with some NIM moderation.