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Elevated balance transfer attrition
View Risks →Bajaj Housing Finance Limited — Q3 FY26
Bajaj Housing Finance reported a solid Q3 FY26 with AUM growth of 23% YoY to ₹1.33 lakh crore, driven by 32% YoY disbursement growth to ₹16,545 crore.
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Bajaj Housing Finance reported a solid Q3 FY26 with AUM growth of 23% YoY to ₹1.33 lakh crore, driven by 32% YoY disbursement growth to ₹16,545 crore. PAT rose 21% YoY to ₹665 crore, with annualized ROA of 2.3% and ROE of 12.3%. Asset quality remained healthy with GNPA at 27 bps and NNPA at 11 bps. Net interest margin held steady at 4%, while cost of funds improved 50 bps YoY to 7.3%. The company is scaling its near-prime and affordable housing SBU, targeting a monthly disbursement run rate of ₹600+ crore in 12-15 months, up from the current ₹325-350 crore. Management guided for 8-10 bps NIM compression for FY26 vs FY25, and reiterated a medium-term cost-to-income target of 14-15% in 3-4 years. Key risk: elevated competitive intensity and balance transfer attrition (20% of portfolio) could pressure growth and margins.
बजाज हाउसिंग फाइनेंस ने तीसरी तिमाही में अच्छा प्रदर्शन किया। कुल कर्ज (AUM) 23% बढ़कर ₹1.33 लाख करोड़ हो गया। नए कर्ज देने में 32% की बढ़ोतरी हुई, जो ₹16,545 करोड़ रही। कंपनी का मुनाफा (PAT) 21% बढ़कर ₹665 करोड़ हो गया। बैड लोन (GNPA) सिर्फ 0.27% है, जो बहुत कम है। ब्याज आय और खर्च का अंतर (NIM) 4% पर स्थिर है। कंपनी अब कम क्रेडिट स्कोर वाले ग्राहकों और किफायती आवास पर ध्यान दे रही है। हर महीने ₹325-350 करोड़ का कर्ज दे रही है, जिसे 12-15 महीनों में ₹600 करोड़ से ऊपर ले जाने का लक्ष्य है। मुनाफा मार्जिन पर थोड़ा दबाव आ सकता है। मुख्य जोखिम: बाजार में कड़ी प्रतिस्पर्धा और 20% ग्राहकों का दूसरी कंपनियों में चले जाना।
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Read Transcript →Quarter Snapshot
AUM
₹1.33 lakh crore
+23% YoY
AUM grew 23% YoY driven by strong disbursement momentum partially offset by higher attrition.
Disbursements
₹16,545 crore
+32% YoY
Disbursements grew 32% YoY, reflecting continued strong demand across product segments.
Cost of Funds
7.3%
-50 bps YoY
Cost of funds improved 50 bps YoY due to policy rate transmission and lower incremental borrowing rates.
SBU Monthly Disbursement Run Rate
₹325-350 crore
Targeting ₹600+ crore in 12-15 months
The near-prime and affordable housing SBU is scaling rapidly; current run rate expected to nearly double.
What Changed vs Last Quarter
NEW
Medium-term cost-to-income ratio target of 14-15% in 3-4 years
Management targets reducing cost-to-income ratio to 14-15% over the next 3-4 years, driven by operating leverage and efficiency improvements.
NEW
SBU monthly disbursement run rate of ₹600+ crore in 12-15 months
The near-prime and affordable housing SBU aims to double its monthly disbursement run rate from ₹325-350 crore to over ₹600 crore within 12-15 months.
NEW
Medium-term AUM growth guidance of 24-26%
Management reiterated medium-term (3-4 year) AUM growth guidance of 24-26%, contingent on stabilization of attrition and industry growth of 12-14%.
UPDATED
NIM compression of 8-10 bps for FY26 vs FY25
Net interest margin expected to compress by 8-10 basis points for the full year FY26 compared to FY25, driven by assignment mix and attrition.
DROPPED
AUM growth to normalize by FY27
Management expects AUM growth to return to medium-term guidance levels in FY27 as attrition pressures stabilize with rate stabilization.
DROPPED
Opex to NTI target of 14-16% in 3-4 years
Management reiterated its aspiration to reduce opex to net total income ratio to 14-16% over a 3-4 year horizon, driven by income expansion and cost efficiency.
DROPPED
Leverage ratio target of 7-8x in 2-2.5 years
Management expects to achieve a gearing ratio of 7-8x within 2-2.5 years, supported by growth and capital management.
NEW RISK
Elevated balance transfer attrition
BT out on home loan portfolio is ~20%, with 60-70% of prepayments attributed to balance transfers. This pressure is expected to persist until interest rates stabilize.
NEW RISK
Regulatory capital charge on undisbursed loans
RBI's consolidated circular removed an illustration allowing capital relief on undisbursed tranches of under-construction home loans and construction finance, leading to a sharper Tier 1 decline. Clarity is awaited.
NEW RISK
Intense competition from banks in prime segment
Competitive intensity from PSU banks on pricing remains high in prime and super-prime segments, pressuring spreads and acquisition costs.
NEW RISK
Potential margin compression from lower assignment income
If home loan growth remains subdued relative to non-HL growth, higher assignment may be needed to manage PBC, which could compress NIMs further.
RISK GONE
Elevated home loan attrition
Home loan attrition rose to 21-22% annualized from 15-16% last year, driven by aggressive pricing from PSU banks, which could pressure AUM growth.
RISK GONE
NIM compression from rate cuts and competition
Management guided for 15-20 bps NIM compression in FY26, with further pressure from expected December rate cut and competitive pricing, especially in home loans.
RISK GONE
Affordable housing segment asset quality
While management is scaling affordable housing cautiously, the segment inherently carries higher credit risk, which could increase credit costs if not managed well.
RISK GONE
Parent dilution timeline uncertainty
Bajaj Finance holds 88% stake; regulatory requirement to reduce to 75% by September 2029 may lead to equity dilution, but management provided no clear timeline or plan.
Fast read
Guidance and risk preview
Net interest margin expected to compress by 8-10 basis points for the full year FY26 compared to FY25, driven by assignment mix and attrition.
BT out on home loan portfolio is ~20%, with 60-70% of prepayments attributed to balance transfers.
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