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Motor OD loss ratio elevated due to pricing pressure and GST
View Risks →Bajaj Finserv — Q3 FY26
Bajaj Finserv reported a strong Q3 FY26 with consolidated total income growing 24% YoY to ₹33,978 crore and PAT (before exceptional items) rising 32% YoY to ₹2,936 crore.
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Bajaj Finserv reported a strong Q3 FY26 with consolidated total income growing 24% YoY to ₹33,978 crore and PAT (before exceptional items) rising 32% YoY to ₹2,936 crore. The life insurance business delivered its highest-ever VNB of ₹405 crore (+59% YoY) with NBM expanding to 19% (vs 15.1% last year), driven by the 2.0 strategy focusing on profitable growth. General insurance maintained a healthy combined ratio of 97.9% despite motor OD loss ratio pressures. The lending subsidiaries (BFL, BHFL) posted robust AUM growth of 22% and 23% respectively, with improving asset quality. The acquisition of Allianz's 23% stake in insurance subsidiaries was completed, strengthening group control. Key risks include elevated motor loss ratios due to pricing pressure and GST impact, and potential tapering of VNB growth as base effects kick in.
बजाज फिनसर्व ने वित्त वर्ष 2025-26 की तीसरी तिमाही में शानदार प्रदर्शन किया। कंपनी की कुल आय पिछले साल की तुलना में 24% बढ़कर 33,978 करोड़ रुपये हो गई। मुनाफा (एकमुश्त खर्चों को छोड़कर) 32% बढ़कर 2,936 करोड़ रुपये रहा। जीवन बीमा कारोबार ने सबसे ज्यादा नया मूल्य (VNB) 405 करोड़ रुपये बनाया, जो 59% ज्यादा है। इसकी वजह कंपनी की 2.0 रणनीति है, जो मुनाफे वाली ग्रोथ पर फोकस करती है। सामान्य बीमा का कंबाइंड रेशियो 97.9% रहा, जो अच्छा है। लोन देने वाली कंपनियों (BFL, BHFL) का कर्ज पोर्टफोलियो 22-23% बढ़ा और कर्ज वसूली बेहतर हुई। कंपनी ने एलियांज का 23% हिस्सा खरीदकर बीमा कारोबार पर नियंत्रण मजबूत किया। जोखिम: मोटर बीमा में दाम दबाव और GST का असर, और VNB ग्रोथ धीमी होने की संभावना।
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VNB (Value of New Business) - Life Insurance
₹405 crore
+59% YoY
Highest ever VNB for Bajaj Life, driven by strategy 2.0 focusing on profitable growth.
Combined Ratio - General Insurance
97.9%
-320bps YoY
Improved from 101.1% last year, among the lowest in the multi-line market.
AUM - Bajaj Finance
₹4,85,883 crore
+22.1% YoY
Strong AUM growth driven by diversified business model and robust disbursements.
AUM - Bajaj Finserv AMC
₹30,000+ crore
Fastest to cross ₹30,000 crore in ~2.5 years
AMC reached 26th spot among Indian mutual funds with 56% equity mix.
What Changed vs Last Quarter
NEW
VNB margin expansion to continue but taper
Management expects margin expansion to continue but at a slower pace due to base effects; GST impact pushed back strategy by 2-3 quarters.
NEW
GST impact mitigation of ~325 bps by March 2026
Bajaj Life expects to mitigate about 3.25% of the 4.5% GST impact by Q4 FY26 through product and commission adjustments.
NEW
Bajaj Finserv AMC to launch AIF and PMS by end FY27
A separate company (Bajaj Finserv Alternatives) will launch alternative investment funds and portfolio management services targeting high-net-worth clients.
NEW
Bajaj Life setting up pension fund and GIFT City branch
Regulatory approvals initiated for a pension fund management business and a branch in GIFT City.
DROPPED
Life insurance growth to resume from H2 FY26
After four quarters of flattish retail weighted received premium, management expects significant growth trajectory from Q3 onwards.
DROPPED
Life insurance NBM expansion of 400-600bps for FY26
Management reiterated confidence in margin expansion of 4-6 percentage points for the full year, though GST ITC impact may create noise in H2.
DROPPED
GST ITC impact to be mitigated in two quarters
Management expects to fully mitigate the GST input tax credit impact on life insurance margins within the next two quarters through product and distribution actions.
DROPPED
BFL MSME AUM growth to be 10-12% for FY26
Bajaj Finance has cut unsecured MSME volumes by 25%, leading to slower AUM growth in that segment for the full year.
NEW RISK
VNB growth may taper due to base effect
After a year of ~50% average VNB growth, management expects growth to slow as base effects kick in.
NEW RISK
Persistency dips in life insurance
Persistency ratios declined across a few cohorts in line with industry trends, which could impact future renewal premiums.
NEW RISK
Competitive intensity in general insurance pricing
Analyst raised concern about pricing pressure in motor and health segments; management acknowledged industry-wide correction but did not provide specific mitigation timeline.
RISK GONE
Elevated credit costs in two-wheeler and MSME segments
BFL's net losses and provisions were up 19% YoY, with credit costs remaining elevated due to stress in two-wheeler and MSME portfolios.
RISK GONE
GST ITC impact on life insurance margins
The loss of input tax credit due to GST changes caused a 140bps hit to NBM in Q2, with annualized impact estimated at 450bps if unmitigated.
RISK GONE
General insurance combined ratio above 100%
Combined ratio stood at 102.3% (101.4% ex-1/n), driven by higher acquisition costs from writing long-term motor business. Management expects it to remain near 100% but not below.
Fast read
Guidance and risk preview
Management expects margin expansion to continue but at a slower pace due to base effects; GST impact pushed back strategy by 2-3 quarters.
Industry-wide motor OD loss ratios have risen due to lower IDV post-GST and inflation in repair costs; Bajaj General is also affected.
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