Bajaj Housing Finance FY26 Annual Earnings Summary

Analysts questioned whether continued pricing wars from PSU and private banks could lead to mispricing and further pressure on growth and margins.

PSU banks are aggressively pricing home loans, leading to elevated attrition (21-22%) and yield compression. Management acknowledged this as a cyclical feature but expects it to persist.

BT out reached ~20% of portfolio, driven by aggressive rate cuts by PSU banks. Management expects normalization as rate cycle stabilizes, but near-term pressure persists.

Tier 1 capital dropped sharply due to conservative provisioning for undisbursed tranches of under-construction loans after RBI consolidated guidelines. Clarity awaited.

If money market rates remain elevated without a policy rate hike, the company's ability to pass on costs is limited, leading to further spread compression.

Additional repo rate cuts beyond the current 100 bps could prolong competitive pricing pressure and portfolio attrition, delaying the expected normalization by Q3 FY26.

Management acknowledged moderation in the real estate market, which could further dampen loan demand and intensify competition.

Analyst questioned whether NIM decline could be sharper than guided 15-20bps. Management did not rule out further compression if competitive pressures intensify or rate cuts accelerate.

As the company scales affordable housing and non-prime segments, credit costs could rise from current low levels. Management guided for normalized credit cost of 20-25bps, but actuals may vary.

Pricing competition from banks remains intense, especially in prime/super-prime, pressuring spreads. Management views this as a permanent feature, not transient.

The affordable/near-prime book is still young (18 months); early indicators are positive, but delinquencies may emerge as the portfolio matures beyond 24 months.

BT-out rates remained elevated in Q4 despite expectations of stabilization, driven by aggressive pricing from public and private sector banks.