Bajaj Finance Q2 FY27 Profit Rises 29% to ₹6,367 Crore as AUM Grows 26%

Bajaj Finance Delivers Strong Profit Growth in September Quarter

Bajaj Finance Limited reported a 28.7% year-on-year increase in consolidated net profit to ₹6,367 crore for the second quarter of financial year 2026–27, supported by strong loan growth, higher net interest income and improved credit costs compared with the previous year.

The non-banking financial company announced its financial results on October 19, 2026, for the quarter ended September 30.

Consolidated profit after tax increased from ₹4,948 crore in the corresponding quarter of the previous financial year.

Assets under management (AUM) expanded 26% year-on-year to approximately ₹5.85 lakh crore, reflecting growth across several lending businesses.

Net interest income increased 24% to ₹13,335 crore, while net total income rose 23% to ₹15,974 crore.

The company booked 13.45 million new loans during the quarter and added 4.42 million customers, taking its total customer franchise to 128.85 million.

Gold loans emerged as an important growth driver, with the portfolio more than doubling from the previous year.

Asset quality improved on a year-on-year basis, although gross and net non-performing asset ratios increased slightly compared with the preceding quarter.

The results highlight Bajaj Finance's continued expansion across consumer lending, business finance and secured credit products.

Bajaj Finance Q2 FY27 Financial Highlights

The figures indicate that Bajaj Finance maintained strong business growth while improving several credit-quality indicators compared with the previous year.

Consolidated Net Profit Increases to ₹6,367 Crore

Bajaj Finance reported consolidated profit after tax of ₹6,367 crore, compared with ₹4,948 crore in Q2 FY26.

The increase of ₹1,419 crore represented growth of approximately 28.7%.

Sequentially, consolidated profit increased from ₹6,081 crore in the June quarter.

The earnings improvement was supported by higher interest income and continued expansion in the company's loan portfolio.

Lower adjusted loan losses also contributed to profitability.

The company reported additional management and macroeconomic provisions during the quarter, reflecting a cautious approach to potential credit risks.

Excluding these additional provisions, adjusted loan losses declined compared with the previous year.

The combination of higher lending income and improved underlying credit costs supported the increase in profit.

However, the company continues to monitor credit performance across its different lending categories.

Net Interest Income Rises 24% to ₹13,335 Crore

Net interest income increased to ₹13,335 crore from ₹10,785 crore in the September 2025 quarter.

The increase of approximately ₹2,550 crore represented year-on-year growth of 24%.

Net interest income measures the difference between interest earned on loans and other interest-bearing assets and the interest paid on borrowings.

It is a central indicator of lending profitability.

For Bajaj Finance, the increase reflected growth in assets under management and continued demand for financing products.

The company operates across consumer finance, commercial lending, gold loans and other secured and unsecured credit categories.

Higher lending volumes supported interest income during the quarter.

However, the sustainability of net interest income growth will depend on loan demand, funding costs and interest margins.

Management expects some pressure on net interest margins during FY27.

Net Total Income Expands 23%

Bajaj Finance reported net total income of ₹15,974 crore, compared with ₹12,982 crore a year earlier.

The increase represented growth of approximately 23%.

Net total income includes net interest income and other operating income.

The improvement reflects the expansion of the company's financial services activities.

The company also reported pre-provisioning operating profit of ₹10,699 crore.

This represented growth of 23% from ₹8,685 crore in the corresponding quarter of the previous year.

Pre-provisioning operating profit measures operating earnings before loan-loss provisions and certain other adjustments.

It provides an indication of the profitability generated by the underlying lending business.

The increase demonstrates that Bajaj Finance's operating income continued to expand alongside its loan portfolio.

Assets Under Management Reach ₹5.85 Lakh Crore

Consolidated assets under management increased to ₹5,84,624 crore as of September 30, 2026.

This compared with ₹4,62,261 crore a year earlier.

The increase of approximately ₹1.22 lakh crore represented growth of 26%.

During the September quarter alone, Bajaj Finance added ₹37,680 crore to its AUM.

The growth reflects continued expansion across multiple lending segments.

Assets under finance increased approximately 27% year-on-year to ₹5.74 lakh crore.

AUM is an important performance indicator for non-banking financial companies because it measures the scale of loans and other managed financial assets.

However, rapid AUM growth also requires disciplined underwriting and sufficient funding.

Bajaj Finance's ability to maintain asset quality while expanding its portfolio will remain important for future profitability.

Loan Growth Reaches Fastest Pace Since March 2025

The 26% increase in assets under management represented Bajaj Finance's strongest year-on-year AUM growth since the March 2025 quarter.

The expansion was supported by demand across consumer financing, gold loans, housing finance and other lending categories.

Growth in rural consumer finance also contributed significantly.

The performance indicates that borrowing demand remained strong across several customer segments.

However, the growth rate varied considerably between lending products.

Gold loans and rural consumer finance expanded rapidly, while lending to small and medium enterprises recorded more moderate growth.

This variation reflects differences in market opportunities, customer demand and underwriting strategies.

The company continues to adjust its lending approach according to the risk characteristics of individual products.

Bajaj Finance Books 13.45 Million New Loans

The company booked 13.45 million new loans during Q2 FY27.

This compared with 12.17 million loans in the corresponding quarter of the previous year.

The increase represented approximately 11% year-on-year growth.

New loan bookings indicate the volume of fresh lending relationships and transactions originated during the quarter.

However, loan counts do not directly indicate the value of lending because ticket sizes vary across products.

Consumer loans may have smaller average values than business or secured loans.

Bajaj Finance noted that year-on-year comparisons were affected by differences in the timing of the festive season.

The company expects to book between 60 million and 62 million new loans during FY27.

Achieving this target will depend on customer demand, distribution capacity and credit approval standards.

Customer Franchise Expands to 128.85 Million

Bajaj Finance added 4.42 million customers during the September quarter.

The total customer franchise increased to 128.85 million.

This represented year-on-year growth of approximately 16%.

The expansion demonstrates the scale of the company's retail financial services platform.

A larger customer base can support opportunities for repeat borrowing and cross-selling financial products.

However, customer acquisition alone does not guarantee profitability.

The company must manage acquisition costs, customer engagement and credit performance.

Existing customers can provide opportunities for additional lending products when their financial requirements change.

Bajaj Finance's ability to deepen customer relationships will remain important as it pursues further growth.

Gold Loan Portfolio More Than Doubles

Gold-backed lending emerged as one of the strongest growth areas during the quarter.

Bajaj Finance's gold loan portfolio increased to approximately ₹24,195 crore from ₹11,789 crore a year earlier.

The portfolio more than doubled on a year-on-year basis.

Gold loans are secured by jewellery or other eligible gold collateral.

Demand for these loans can be influenced by household liquidity requirements, gold prices and the availability of alternative financing.

The company has been expanding its physical distribution network to support the business.

Gold-backed lending offers opportunities for growth, but it also requires careful management of collateral valuation, loan tenure and repayment behaviour.

The company reported some transitional movement in the credit classification of certain short-tenor gold loans.

Management indicated that this development was not expected to materially affect credit costs.

Gold Loan Branch Network Reaches 2,022

Bajaj Finance continued to expand its gold loan distribution network during the September quarter.

The company added 321 gold loan branches, taking the total to 2,022.

The expansion is intended to improve customer access and support loan growth.

Physical branches remain important in gold lending because collateral must be assessed, documented and securely handled.

The company plans to increase its gold loan branch network to approximately 2,700–2,800 locations by the end of FY27.

This would represent a substantial expansion from the September 2026 level.

However, additional branches involve operating expenditure and require effective risk controls.

The profitability of the network will depend on customer demand, loan volumes and operating efficiency.

Rural Consumer Finance Grows 63%

Bajaj Finance reported approximately 63% year-on-year growth in its rural consumer finance business.

The strong expansion reflects opportunities in smaller towns and rural markets.

Rural consumers increasingly use formal financing products for household purchases and other financial requirements.

However, credit demand and repayment capacity can be influenced by agricultural income, local employment and regional economic conditions.

Lenders operating in these markets must adapt their products and risk assessments to customer circumstances.

The growth in rural consumer finance contributed to the company's overall AUM expansion.

Sustaining this performance will require careful monitoring of portfolio quality.

SME Lending Grows at a More Moderate Pace

Bajaj Finance's lending to small and medium enterprises increased approximately 3% year-on-year.

The growth was considerably slower than the expansion in gold loans and rural consumer finance.

The company has tightened underwriting standards in parts of its SME lending portfolio following earlier increases in delinquencies.

This approach reflects an emphasis on balancing business growth with credit risk.

SME borrowers operate across manufacturing, trading, services and other industries.

Their repayment capacity can be affected by working capital conditions, business demand and economic changes.

More selective underwriting may moderate short-term loan growth.

However, it can also support portfolio quality when credit conditions are uncertain.

The company's future SME lending performance will depend on business demand and the effectiveness of its risk management measures.

Gross NPA Ratio Improves to 1.06%

Bajaj Finance reported a gross non-performing asset ratio of 1.06% as of September 30, 2026.

This compared with 1.24% a year earlier.

The net NPA ratio declined to 0.42% from 0.60%.

The year-on-year improvement indicates better overall asset quality compared with the corresponding period of FY26.

However, the ratios increased slightly on a sequential basis.

Gross NPAs rose from 0.96% in the June quarter, while net NPAs increased from 0.39%.

The sequential movement indicates that some credit-quality pressure remained within the portfolio.

Investors will monitor whether the increase is temporary or develops into a broader trend.

The company's ability to maintain credit discipline will remain important as lending expands.

Loan Losses and Provisions Increase 4%

Bajaj Finance reported loan losses and provisions of ₹2,166 crore during Q2 FY27.

This compared with ₹2,080 crore in the corresponding quarter of the previous year.

The increase was approximately 4%.

The reported amount included ₹337 crore of additional management and macroeconomic provisions.

Excluding these provisions, adjusted loan losses declined approximately 12% to ₹1,829 crore.

The additional provisions reflect management's assessment of potential risks beyond currently identified credit losses.

Such provisions can provide an additional buffer against adverse developments.

However, the need for provisions also highlights the importance of monitoring credit conditions.

Future provisioning requirements will depend on borrower repayment behaviour, portfolio growth and economic conditions.

Credit Cost Ratio Declines to 1.56%

The company's loan loss ratio, measured against average assets under finance, improved to 1.56%.

This compared with 1.88% in the previous year.

Excluding the additional management and macroeconomic provisions, the ratio stood at approximately 1.32%.

The reduction indicates lower adjusted credit costs relative to the size of the loan portfolio.

Credit costs are particularly important for non-banking lenders because they directly influence profitability.

Rapid lending growth can create future credit risks if underwriting standards weaken.

Bajaj Finance has emphasised disciplined lending and risk management across its portfolio.

However, the company will need to monitor credit performance as newer loan cohorts mature.

Gold Loan Classification Shows Transitional Movement

Bajaj Finance reported an increase in Stage 2 assets within its gold loan portfolio.

Stage 2 assets generally represent loans that have experienced a significant increase in credit risk since initial recognition but are not classified as credit-impaired.

The company attributed the increase partly to certain short-tenor gold loan schemes that are no longer being offered.

Management described the movement as transitional.

The gold loan portfolio included approximately ₹22,958 crore of Stage 1 assets, ₹1,099 crore of Stage 2 assets and ₹169 crore of Stage 3 assets.

The company indicated that it intends to focus on longer-tenure gold loan products going forward.

Management does not expect the transitional increase in Stage 2 assets to materially affect credit costs.

Nevertheless, investors will monitor repayment trends and subsequent changes in asset classification.

Cost of Funds Declines to 7.31%

Bajaj Finance reported a cost of funds of 7.31% during the September quarter.

This represented a sequential reduction of nine basis points.

Funding costs are important for non-banking financial companies because they borrow money to finance lending operations.

A lower cost of funds can support interest margins when lending yields remain stable.

However, the company's overall net interest margin also depends on the mix of loans, customer pricing and other factors.

Management expects some moderation in net interest margins during FY27.

The company will therefore need to balance loan growth with funding efficiency.

Changes in monetary policy and market interest rates can influence borrowing costs.

Borrowings Reach Approximately ₹5 Lakh Crore

Bajaj Finance reported consolidated borrowings of approximately ₹5 lakh crore at the end of September 2026.

The funding mix included multiple sources.

Money market instruments accounted for approximately 52% of borrowings.

Bank funding contributed 29%.

Deposits represented 14%, while external commercial borrowings accounted for the remaining 5%.

A diversified funding structure can reduce dependence on any single source of finance.

However, each funding category carries different costs, maturities and market risks.

The company must maintain sufficient liquidity to meet obligations and support loan disbursements.

Funding management will remain important as AUM expands.

Deposit Book Stands at ₹69,754 Crore

Bajaj Finance's consolidated deposit book stood at ₹69,754 crore as of September 30.

Deposits accounted for approximately 14% of consolidated borrowings.

Public deposits provide one source of funding for eligible non-banking financial companies.

However, deposit-taking NBFCs operate under regulatory requirements governing acceptance and management of deposits.

The company also relies on bank borrowings and capital market instruments.

Maintaining a balanced funding mix can support liquidity management.

The cost and availability of deposits will remain relevant to the company's overall funding strategy.

Liquidity Buffer Provides Financial Flexibility

Bajaj Finance reported a liquidity buffer of approximately ₹19,995 crore at the end of September.

Liquidity reserves help financial institutions meet near-term obligations and manage unexpected funding requirements.

They are particularly important for lenders that rely on wholesale borrowings and capital market funding.

A strong liquidity position can support business continuity during periods of financial market volatility.

However, liquidity reserves must be managed alongside the cost of holding liquid assets.

The company's ability to maintain funding access will remain important as its lending portfolio grows.

Board Approves Proposed ₹17,500 Crore Capital Raise

Bajaj Finance's board has approved proposals to raise up to ₹17,500 crore through a combination of equity-related instruments.

The proposed fundraising includes up to ₹11,700 crore through a qualified institutional placement.

The company also plans to raise up to ₹5,800 crore through warrants convertible into equity shares, proposed to be issued to promoter and holding company Bajaj Finserv.

The transactions remain subject to shareholder approval and other applicable requirements.

The proposed capital raise is intended to support business expansion and strengthen financial resilience.

Additional capital can provide capacity for future lending growth.

However, equity issuance can also affect the company's shareholding structure and earnings per share.

The final impact will depend on the terms and completion of the fundraising.

Capital Adequacy Ratio Remains Above 20%

Bajaj Finance reported a consolidated capital adequacy ratio of 20.33% at the end of September 2026.

The Tier-I capital ratio stood at 19.43%.

Capital adequacy measures the financial resources available to absorb losses relative to risk-weighted assets.

A strong capital position is important for lenders pursuing rapid growth.

The proposed capital raising could further strengthen the company's capital base if completed.

However, future capital requirements will depend on loan growth, portfolio composition and regulatory standards.

The company will need to balance expansion with efficient capital utilisation.

Return on Equity Improves to 20.6%

Bajaj Finance reported an annualised return on equity of approximately 20.6% during the quarter.

This compared with 19.1% a year earlier.

Annualised return on assets improved to approximately 4.6% from 4.5%.

These measures indicate how efficiently a financial institution generates profit from its equity and asset base.

The improvement reflects higher earnings and continued business expansion.

However, profitability ratios can change as the company raises additional capital or modifies its lending mix.

Investors will assess whether the company can sustain attractive returns while maintaining asset quality.

Management Targets 26–27% AUM Growth in FY27

Bajaj Finance expects assets under management to grow approximately 26–27% during FY27.

The outlook reflects management's confidence in customer demand and the company's lending capabilities.

The company also expects to book 60–62 million new loans during the financial year.

Customer additions are projected at approximately 18–20 million.

These targets indicate an ambitious expansion strategy.

However, achieving them will depend on market conditions, credit demand and operational execution.

The company will also need to manage funding requirements and maintain underwriting standards.

Management has indicated that net interest margins may experience modest pressure during the year.

Operating Efficiency Remains a Priority

Bajaj Finance reported operating expenses equivalent to approximately 33% of net total income during the September quarter.

This compared with 33.1% a year earlier.

The company expects an improvement of approximately 25–40 basis points in its operating expense-to-net total income ratio during FY27.

Operating efficiency is important because customer acquisition, technology infrastructure and branch expansion involve substantial expenditure.

Digital processes can help reduce certain costs.

However, physical distribution remains important for businesses such as gold lending.

The company will need to balance investment in growth with cost discipline.

Outlook for the Remainder of FY27

Bajaj Finance enters the second half of FY27 with strong loan growth, expanding customer relationships and improved year-on-year asset quality.

Gold loans and rural consumer finance remain important growth opportunities.

The company is also pursuing a substantial expansion of its gold loan branch network.

The proposed capital raise could strengthen its capacity to support future lending.

However, several factors will influence performance.

These include funding costs, net interest margins, credit quality and competition across lending categories.

The sequential increase in NPA ratios and transitional movement in gold loan classifications will require monitoring.

The company's ability to sustain earnings growth will depend on maintaining a balance between loan expansion and risk management.

Conclusion

Bajaj Finance delivered a strong financial performance in Q2 FY27, reporting a 28.7% increase in consolidated net profit to ₹6,367 crore.

Assets under management expanded 26% to approximately ₹5.85 lakh crore, supported by broad-based lending growth.

Net interest income rose 24% to ₹13,335 crore, while net total income increased 23% to ₹15,974 crore.

The company booked 13.45 million new loans and expanded its customer franchise to 128.85 million.

Gold loans and rural consumer finance were among the strongest growth segments.

Asset quality improved compared with the previous year, although NPA ratios increased slightly on a sequential basis.

The proposed ₹17,500 crore capital raise and management's 26–27% AUM growth outlook indicate continued expansion ambitions.

The company's future performance will depend on sustaining loan demand, maintaining funding efficiency and controlling credit risks as its portfolio grows.