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View Promises →Bajaj Housing Finance Limited — Q1 FY26
Bajaj Housing Finance reported a balanced Q1 FY26 with AUM growth of 24% YoY and PAT growth of 21% YoY to INR 583 crore.
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Bajaj Housing Finance reported a balanced Q1 FY26 with AUM growth of 24% YoY and PAT growth of 21% YoY to INR 583 crore. Asset quality remained healthy with GNPA at 30 bps and NNPA at 13 bps. However, heightened competitive pricing and a benign real estate market led to higher portfolio attrition, prompting management to revise FY26 AUM growth guidance down to 21-23% from the medium-term 24-26% range. Net interest margin is expected to moderate by 15-20 bps due to lower investment and assignment income, though NII is expected to remain stable. Management expects attrition pressures to normalize by Q3 FY26, allowing a return to normal growth trajectory. Key risk: further rate cuts or sustained aggressive pricing by banks could delay recovery and pressure margins further.
बजाज हाउसिंग फाइनेंस ने पहली तिमाही में अच्छा प्रदर्शन किया। उनके कुल कर्ज में 24% और मुनाफे में 21% की बढ़ोतरी हुई, जो 583 करोड़ रुपये रहा। खराब कर्ज का स्तर बहुत कम (0.30%) रहा, जो सेहतमंद है। लेकिन बाजार में कड़ी प्रतिस्पर्धा और रियल एस्टेट की धीमी मांग के कारण कुछ ग्राहक दूसरी कंपनियों में चले गए। इसलिए कंपनी ने इस साल अपने कर्ज वृद्धि का अनुमान 24-26% से घटाकर 21-23% कर दिया है। ब्याज आय पर मुनाफा थोड़ा कम हो सकता है, लेकिन कुल ब्याज आय स्थिर रहेगी। कंपनी को उम्मीद है कि साल की तीसरी तिमाही तक स्थिति सामान्य हो जाएगी। मुख्य जोखिम: अगर बैंक और कर्ज सस्ते करेंगे, तो रिकवरी में देरी हो सकती है।
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Read Transcript →Quarter Snapshot
AUM Growth
24%
+24% YoY
AUM grew 24% YoY, driven by 22% disbursement growth, but moderated due to higher attrition.
Home Loan Disbursement Growth
12%
+12% YoY
Retail disbursements (HL+LAP) grew 12% YoY, slower than overall disbursement growth.
Cost of Funds
7.7%
-20 bps QoQ
Cost of funds reduced 21 bps sequentially to 7.7%, aided by lower incremental borrowing rates.
Portfolio Yield
9.5%
-20 bps QoQ
Portfolio yield declined 20 bps QoQ to 9.5% due to rate cuts and competitive pricing.
What Changed vs Last Quarter
NEW
FY26 AUM growth guidance revised to 21-23%
Management expects AUM growth of 21-23% for FY26, down from medium-term guidance of 24-26%, due to heightened competition and higher attrition.
NEW
NII expected stable in FY26
Net interest income is expected to remain stable and in line with FY25, supported by cost of fund reductions and product mix shifts.
NEW
NIM/NTI to moderate by 15-20 bps in FY26
Net interest margin (as NTI/Assets) is expected to moderate by 15-20 bps due to lower investment income and lower assignment income.
NEW
ROA expected range-bound at 2.0-2.2% for FY26
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.
DROPPED
Cost of funds to decline 34-35 bps in FY26
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.
DROPPED
NIM compression of 10-15 bps expected
With steady book mix, net interest margin could compress by 10-15 bps during FY26, partly offset by asset mix changes.
DROPPED
Credit cost guidance of 20-25 bps on assets
On a steady-state basis (excluding assignment effects), credit cost is expected to be 20-25 bps on assets under management.
DROPPED
No equity capital raise in FY26
Management stated there is no plan to raise new equity capital in FY26, with leverage at 5.1x and headroom up to 7.5x.
NEW RISK
Further rate cuts could delay growth recovery
Additional repo rate cuts beyond the current 100 bps could prolong competitive pricing pressure and portfolio attrition, delaying the expected normalization by Q3 FY26.
NEW RISK
Higher credit cost from lower assignment
Planned lower portfolio assignment in FY26 will result in higher stage-1 provisioning, potentially increasing reported credit costs.
NEW RISK
Softness in real estate demand
Management acknowledged moderation in the real estate market, which could further dampen loan demand and intensify competition.
RISK GONE
NIM compression from rate cuts
Management acknowledged 10-15 bps NIM compression in FY26 due to repo rate cuts, with yield pass-through (45-50 bps) exceeding cost pass-through (34-35 bps).
RISK GONE
Impact of exit penalty removal on LAP
RBI's proposed removal of exit penalties on floating rate loans could increase balance transfers in the LAP segment, though management expects limited material impact.
RISK GONE
ALM mismatch risk
With long-tenor home loans (behavioral maturity 6-8 years) funded by shorter-term liabilities (average 3-5 years), ALM risk requires active management.
🤫 Topics management stopped discussing
Mentioned in Q2 FY25, Q3 FY25, Q4 FY25
On a steady-state basis (excluding assignment effects), credit cost is expected to be 20-25 bps on assets under management.
Fast read
Guidance and risk preview
Management expects AUM growth of 21-23% for FY26, down from medium-term guidance of 24-26%, due to heightened competition and higher attrition.
Additional repo rate cuts beyond the current 100 bps could prolong competitive pricing pressure and portfolio attrition, delaying the expected norm...
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