Bajaj Finance net profit up 22% to Rs 5,553 crore

In Q4 FY26, Bajaj Finance revised the presentation of recoveries from written-off loans, moving them from other operating income to loan losses and provisions. This change led to a decrease in net total income, loan losses and provisions, along with related ratios, although it did not affect operating or net profit, according to the company.

Strategic Realignment

The one-time action taken in Q4 FY26 included an accelerated expected credit loss (ECL) provision of Rs 142 crore aimed at management and macroeconomic overlays to bolster balance sheet resilience. The adjustment in the presentation of recoveries led to changes in key ratios: operating expenses to net total income was 33.8%, loan losses and provisions to average assets under finance (AUF) stood at 1.65%, the annualised return on assets (ROA) was 4.6%, and the annualised return on equity (ROE) was 19.7%.

Before the one-time actions, the annualised ROA in Q4 FY26 was 4.7%, compared to 4.5% in Q4 FY25, while the annualised ROE was 20.0%, up from 18.7% in Q4 FY25.

For the first time, Bajaj Finance crossed the Rs 5 lakh crore mark in consolidated assets under management (AUM), with AUM reaching Rs 5,09,975 crore as of March 31. The company also reached a significant milestone of 50 million loans, reporting 52.4 million new loans issued in FY26.

During the March quarter, Bajaj Finance achieved AUM growth of Rs 25,498 crore. New loans booked during Q4 FY26 totalled 2.89 million, reflecting a 20% year-on-year growth. The customer base grew by 17% to reach 119.33 million, with 3.93 million new customers.

Bajaj Finance’s net interest income increased by 20% to Rs 11,781 crore, while net total income rose by 21% to Rs 14,209 crore. The ratio of operating expenses to net total income for Q4 FY26 stood at 33.8%, slightly up from 33.6% in Q4 FY25. Before the presentation change, this ratio was 33.2% in Q4 FY26 compared to 33.1% in Q4 FY25. The cost of funds at 7.41% improved by 4 basis points over Q3FY26.

Loan losses and provisions for Q4 FY26 amounted to Rs 2,008 crore, down from Rs 2,167 crore in Q4 FY25. The loan loss to average AUF ratio was 1.65% in Q4 FY26, improving from 2.17% in Q4 FY25. As of March 31, 2026, gross non-performing assets (NPA) and net NPA stood at 1.01% and 0.41%, respectively, compared to 0.96% and 0.44% as of March 31, 2025.

FY27 Outlook

Rajiv Jain, Vice Chairman and Managing Director of Bajaj Finance, stated that the company delivered a strong performance in FY26 across key metrics, leading to robust profit growth and improved return ratios. He mentioned that AUM growth was slightly below expectations due to ‘risk-first’ actions in the MSME sector. Jain noted that proactive risk management contributed to lower credit costs for FY26.

Looking ahead, Bajaj Finance’s focus for FY27 will be on increasing resilience and strengthening the balance sheet. Jain estimated AUM growth for FY27 to be between 22-24%, supported by new businesses launched in recent years. He anticipated a slight moderation in net interest margin (NIM) and projected non-interest income to grow by 16-18%. The ratio of operating expenses to net total income is expected to improve by 25-40 basis points from current levels. The company remains confident in adding 15-17 million customers in FY27.

Jain expressed optimism for FY27, anticipating stability due to easing geopolitical tensions and macroeconomic stability. Regarding the FINAI transformation journey, he mentioned the company’s plan to significantly accelerate the deployment of AI use cases across revenue, cost management, customer engagement, underwriting, productivity, and financial oversight.

The credit cost or net loan loss to average AUF is expected to fall within the range of 1.45-1.60%. Return on assets for FY27 is projected to be between 4.4% and 4.6%, while return on equity is estimated to be in the range of 19 to 20%. Both gross NPA and net NPA are expected to remain below long-term guidance.