Bajaj Finance Ltd (BFL), India’s leading non-banking financial company (NBFC), reported robust business updates for the first quarter of FY26, indicating continued strong growth momentum. The company’s Assets Under Management (AUM) surged by 25% year-on-year to reach ₹3,34,200 crore as of June 30, 2025, compared to ₹2,67,400 crore in the same period last year.
The company released its Q1 FY26 business updates on Thursday evening, showcasing growth across all segments despite a volatile interest rate environment and tightening systemic liquidity. Analysts view these numbers as a testament to the resilience of BFL’s diversified business model and its ability to expand in competitive retail lending markets.
Key Highlights of Bajaj Finance Q1 FY26 Business Updates
| Metric | Q1 FY26 | Q1 FY25 | Growth (%) |
|---|---|---|---|
| New Loans Booked | 94.3 lakh | 77.4 lakh | +22% |
| Assets Under Management (AUM) | ₹3,34,200 crore | ₹2,67,400 crore | +25% |
| Customer Franchise | 8.85 crore | 7.73 crore | +14% |
| Deposits Book Size | ₹59,300 crore | ₹49,900 crore | +19% |
| Liquidity Buffer | ₹12,700 crore | ₹11,100 crore | +14% |
The company added 28.3 lakh new customers during Q1, maintaining its customer acquisition trajectory despite concerns over sector-wide demand moderation. Its deposit book continued to grow steadily, reflecting consumer confidence in its fixed deposit offerings amid market volatility.
Segment-wise AUM Distribution (Provisional)
| Business Segment | AUM (₹ crore) | % Share of Total AUM | YoY Growth |
|---|---|---|---|
| Consumer B2C | 1,23,500 | 37% | +24% |
| SME Lending | 58,300 | 17% | +23% |
| Rural Lending | 28,900 | 9% | +21% |
| Commercial Lending | 34,600 | 10% | +18% |
| Mortgages | 71,700 | 21% | +28% |
| Auto Finance | 17,200 | 5% | +19% |
| Total | 3,34,200 | 100% | +25% |
Mortgage and consumer B2C segments remained key growth drivers for Bajaj Finance, with both showing strong momentum driven by festive demand advance purchases and continued urban housing uptake.
Operational Highlights
- Digital Transformation: Continued customer migration to its digital ecosystem under the Bajaj Finserv app and EMI card integrations.
- Product Diversification: Introduction of co-branded credit cards with select private banks, gaining early traction in Tier 1 and Tier 2 cities.
- Asset Quality: Management stated asset quality remained stable with no major deterioration despite inflationary pressures, indicating prudent risk management.
- Geographical Expansion: Added 167 new urban and rural locations during the quarter, expanding its physical footprint to over 4,150 locations nationwide.
Analysts’ Views
Brokerage houses termed the Q1 FY26 updates as “above expectations,” highlighting the company’s balanced growth across consumer, SME, and mortgage portfolios.
Key analyst takeaways include:
- Motilal Oswal: Strong growth in AUM and customer acquisition despite tightened NBFC liquidity indicates robust franchise strength.
- ICICI Securities: Deposit growth momentum remains healthy, supporting cost of funds stability amid rising market rates.
- Axis Capital: New loan growth and stable asset quality reinforce the FY26 earnings outlook, though yield compression risks persist due to competitive lending rates.
Bajaj Finance Stock Performance Snapshot
| Date | Closing Price (₹) | Change (₹) | Change (%) |
|---|---|---|---|
| July 3, 2025 | 8,223.50 | +133.20 | +1.64% |
| July 2, 2025 | 8,090.30 | -42.50 | -0.52% |
| July 1, 2025 | 8,132.80 | +74.10 | +0.92% |
The stock has gained nearly 8.6% over the past month, outperforming the Nifty Financial Services Index, reflecting market optimism around its business updates and upcoming quarterly earnings.
Recent Strategic Developments
- AI-Powered Collections Platform: Launched an AI-integrated collections and recovery system to optimise field operations and enhance customer experience.
- EV Financing Expansion: Strengthened partnerships with EV OEMs for two-wheeler and three-wheeler electric vehicle financing, targeting rapid urban and semi-urban penetration.
- Regulatory Compliance Readiness: Completed system upgrades to comply with RBI’s digital lending guidelines, ensuring transparency and data privacy adherence.
Management Outlook
The management reiterated its FY26 guidance of 24-26% AUM growth driven by diversified retail demand, steady deposit inflows, and digital transformation synergies.
In its update, Bajaj Finance stated:
“Our diversified portfolio strategy, strong brand recall, and investments in technology will continue to drive sustainable and profitable growth while maintaining prudent risk management practices.”
Sectoral Context: NBFC Growth Trends
India’s retail-focused NBFC sector is projected to grow at 14-16% CAGR over FY25-FY27 as per CRISIL, led by:
- Increased urban consumption and aspirational spending
- Credit penetration in Tier 2/3 towns for consumer durables and home improvements
- Strong demand for used vehicle financing
- SME expansion post-GST formalisation and digital onboarding
However, risks include rising cost of funds due to monetary tightening, regulatory scrutiny on unsecured loans, and increasing competition from fintech lenders.
Challenges Ahead
Despite strong growth momentum, Bajaj Finance faces challenges such as:
- Yield compression due to competitive pricing in consumer durable and personal loans
- Asset quality risks if inflation impacts repayment capacities in low-income segments
- Regulatory risks around digital lending and fair practice codes
- Disruption risks from fintech players offering instant small-ticket credit with aggressive onboarding offers
Outlook for Q1 FY26 Results
Bajaj Finance is scheduled to announce its full Q1 FY26 financial results in the third week of July. Analysts expect:
- Net Interest Income (NII) growth of 26-28% YoY
- Profit After Tax (PAT) growth of 28-30% YoY
- Gross NPA ratio to remain stable below 1.4% due to effective collection efficiencies
Conclusion
Bajaj Finance’s Q1 FY26 business updates highlight strong growth across its lending segments, continued customer acquisition momentum, and steady deposit franchise expansion despite sectoral headwinds. With robust digital initiatives, prudent risk controls, and strategic diversification, the company remains well-positioned to sustain its leadership in India’s retail NBFC sector.
Disclaimer: This report is based on company filings, market data, and analyst commentary. It does not constitute investment advice or personal recommendations.
