Bajaj Housing Finance Management Guidance Tracker

Management expects retail disbursement growth to accelerate as the affordable and near-prime verticals start delivering, offsetting the current 7% YoY growth in retail disbursements.

Management expects AUM to grow at 24-26% annually over the next three years, driven by home loans and the new affordable vertical.

Management expects AUM growth of 21-23% for FY26, down from medium-term guidance of 24-26%, due to heightened competition and higher attrition.

Management expects AUM growth to return to its medium-term trajectory in FY27 as attrition pressures ease with rate stabilization.

Management targets doubling the current monthly run rate of INR 325-350 crore to over INR 600 crore within 12-15 months through strategic investments.

Management reiterated medium-term AUM growth of 24-26% over 3-4 years, contingent on industry growth of 12-14% and stabilization of attrition.

The Sambhav business is on track to achieve monthly disbursements of over INR 600 crore within the next 12 months.

Normalized credit cost (excluding overlay releases) is expected to stay in the 14-17 bps band, as overlay is nearly exhausted (only ₹10 crore remaining).

Operating expenses as a percentage of net interest income are targeted to fall to 14-15% in the medium term, from 19.8% currently.

Return on assets is guided at 2-2.2% and return on equity at 13-15% in the medium term, with leverage of 7-8 times.

Assuming 75 bps cumulative repo rate cuts, management expects cost of funds to drop by 34-35 bps on a full-year basis in FY26.

With steady book mix, net interest margin could compress by 10-15 bps during FY26, partly offset by asset mix changes.

On a steady-state basis (excluding assignment effects), credit cost is expected to be 20-25 bps on assets under management.

Net interest margin (as NTI/Assets) is expected to moderate by 15-20 bps due to lower investment income and lower assignment income.

Return on assets is expected to remain in the 2.0-2.2% range, in line with medium-term guidance, with ROE moderating to 11-12% due to excess capital.

Management expects full-year net interest margin to decline 15-20bps year-over-year, factoring in portfolio yield pressure and another expected rate cut in December.

Management reiterated its aspiration to achieve an operating expense to net total income ratio of 14-16% over a 3-4 year horizon.

Net total income margin expected to compress 8-10 basis points for the full year, revised from earlier 15-20 bps guidance due to higher assignment income in Q3.

Management expects ROA to be at the upper end of the medium-term guidance range, assuming no policy rate change, with margin compression offset by OpEx efficiency and lower credit costs.

Net interest margin in Q1 FY27 is expected to be broadly stable versus Q4 FY26, with a slight compression possible due to yield pressure.

Management stated internal view is to keep construction finance mix below ~15% of AUM, currently at 11.7%.

Management considers 8x leverage as sustainable and will manage capital deployment to reach that level over time.

Credit costs are expected to stay in the range of 20-25 basis points, with GNPA between 40-60 bps and provisioning coverage of 40-50%.

Management stated there is no plan to raise new equity capital in FY26, with leverage at 5.1x and headroom up to 7.5x.

Management expects to reach a gearing ratio of approximately 7.5x within two to two and a half years, driven by growth and capital management.

Management expects cost of funds to reduce by 20-25 bps in FY27 due to repricing of existing borrowings and lower incremental borrowing costs.

Management will provide a detailed assessment for FY27 along with Q1 FY27 results, given macro uncertainty.

Net interest income is expected to remain stable and in line with FY25, supported by cost of fund reductions and product mix shifts.