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View Promises →Bajaj Housing Finance Limited — Q2 FY26
Bajaj Housing Finance reported a stable Q2 FY26 with AUM growth of 24% YoY to INR 1,26,749 crore and PAT growth of 18% YoY to INR 643 crore.
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Bajaj Housing Finance reported a stable Q2 FY26 with AUM growth of 24% YoY to INR 1,26,749 crore and PAT growth of 18% YoY to INR 643 crore. Disbursements grew 32% YoY to INR 15,914 crore, driven by strong momentum in home loans and LRD. Asset quality improved with GNPA at 0.26% and NNPA at 0.12%. Cost of funds declined 50bps YoY to 7.4%, but net interest margin compressed 10bps YoY to 4% due to portfolio yield pressure. Management maintained full-year NIM guidance of 15-20bps compression, factoring in another expected rate cut. Competition from PSU banks remains intense, especially in prime home loans, leading to elevated attrition of 21-22%. The company is focusing on deepening micro-market presence and expanding non-prime segments. A key risk is that margin compression could exceed guidance if competitive pricing pressures persist beyond expectations.
बजाज हाउसिंग फाइनेंस ने Q2 FY26 में अच्छा प्रदर्शन किया। उनका कुल कर्ज (AUM) 24% बढ़कर ₹1,26,749 करोड़ हो गया। मुनाफा (PAT) 18% बढ़कर ₹643 करोड़ रहा। होम लोन और LRD की मजबूत मांग से कर्ज देने में 32% की बढ़ोतरी हुई। खराब कर्ज (GNPA) सिर्फ 0.26% और शुद्ध खराब कर्ज (NNPA) 0.12% रहा, जो अच्छी गुणवत्ता दिखाता है। उनकी फंड लागत 7.4% पर आ गई, लेकिन ब्याज मार्जिन (NIM) 4% पर आ गया। कंपनी को लगता है कि मार्जिन में और 15-20bps की कमी हो सकती है। PSU बैंकों से कड़ी प्रतिस्पर्धा है, जिससे 21-22% ग्राहक छोड़ रहे हैं। कंपनी छोटे बाजारों और गैर-प्राइम सेगमेंट पर ध्यान दे रही है। अगर प्रतिस्पर्धा बढ़ी तो मार्जिन और गिर सकता है।
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Intense competition from PSU banks in prime home loans
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AUM
INR 1,26,749 crore
+24% YoY
AUM grew 24% year-over-year, driven by strong disbursement growth across all product segments.
Disbursements
INR 15,914 crore
+32% YoY
Disbursements grew 32% YoY, significantly outpacing industry home loan growth of 6-7%.
Cost of Funds
7.4%
-50bps YoY
Cost of funds declined 50bps YoY due to policy rate transmission and lower incremental borrowing costs.
Home Loan Attrition Rate
21-22%
+5-6pp YoY
Annualized home loan attrition rose to 21-22% from 15-16% last year, largely due to PSU bank competition.
What Changed vs Last Quarter
NEW
NIM compression of 15-20bps for FY26
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.
NEW
AUM growth to revert to medium-term guidance in FY27
Management expects AUM growth to return to its medium-term trajectory in FY27 as attrition pressures ease with rate stabilization.
NEW
OPEX to NTI target of 14-16% in 3-4 years
Management reiterated its aspiration to achieve an operating expense to net total income ratio of 14-16% over a 3-4 year horizon.
NEW
Leverage ratio target of 7.5x in 2-2.5 years
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.
DROPPED
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.
DROPPED
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.
DROPPED
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.
DROPPED
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.
NEW RISK
Intense competition from PSU banks in prime home loans
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.
NEW RISK
Margin compression may exceed guidance
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.
NEW RISK
Credit cost normalization from non-prime expansion
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.
NEW RISK
Assignment income volatility
Management reduced assignment activity due to excess capital, leading to lower fee income. Future assignment levels depend on PBC requirements and ALM needs, creating income uncertainty.
RISK GONE
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.
RISK GONE
Sustained aggressive pricing by banks
Analysts questioned whether continued pricing wars from PSU and private banks could lead to mispricing and further pressure on growth and margins.
RISK GONE
Higher credit cost from lower assignment
Planned lower portfolio assignment in FY26 will result in higher stage-1 provisioning, potentially increasing reported credit costs.
RISK GONE
Softness in real estate demand
Management acknowledged moderation in the real estate market, which could further dampen loan demand and intensify competition.
🤫 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.
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Guidance and risk preview
Management expects full-year net interest margin to decline 15-20bps year-over-year, factoring in portfolio yield pressure and another expected rat...
PSU banks are aggressively pricing home loans, leading to elevated attrition (21-22%) and yield compression.
View Risks →