AI-assisted research analysis by FutureKnowledge. Sources checked 19 October 2026. Figures are consolidated unless labelled standalone, and are as reported by the company and the publications named. This is not investment advice.
Bajaj Finance, India’s largest non-bank lender by assets under management, reported September-quarter results after the market closed on 19 October that show loan growth speeding up rather than slowing. Consolidated profit rose about 29%, assets under management (AUM) grew 26%, and management raised its growth expectation for the year. At the same time, the company is preparing to raise up to ₹17,500 crore of fresh equity, and bad-loan ratios edged up from the June quarter. This analysis looks at the numbers, the drivers and what they mean for consumer credit.
What happened
According to Upstox’s results report, consolidated net profit for July-September 2026 was ₹6,366.57 crore, up 28.7% from ₹4,947.76 crore a year earlier, and net interest income (NII) rose 24% to ₹13,335 crore. Investywise’s summary of the filing puts profit before tax at ₹8,537 crore against ₹6,608 crore, net total income at ₹15,974 crore (up 23%) and operating expenses at 33.0% of net total income.
AUM reached ₹5,84,624 crore, up 26% from ₹4,62,261 crore, after a quarterly addition of ₹37,680 crore. That compares with ₹5,46,944 crore at the end of June and 24% growth, according to the company’s own Q1 FY27 investor presentation. The company booked 13.45 million new loans, up 11%, added 4.42 million customers and ended the quarter with 128.85 million customers. On a standalone basis, Free Press Journal reported net profit of ₹5,536 crore, up 30.2%, on revenue from operations of ₹20,891 crore.
Gross non-performing assets (GNPA) were 1.06% and net NPA 0.42%. Both are lower than a year ago (1.24% and 0.60%) but higher than the 0.96% and 0.39% reported for June. Capital adequacy was 20.33%, down from 20.90% in June as the balance sheet grew.
The housing finance arm also grew quickly. Bajaj Housing Finance’s provisional update filed with the NSE showed AUM of about ₹1,58,190 crore, up 25%, and quarterly disbursements of about ₹19,930 crore against ₹15,914 crore a year earlier. Whalesbook reported the subsidiary’s profit rose 18% to ₹757 crore.
Bajaj Finance shares closed at ₹957.35 on 19 October, down 2.52%, before the results were released.
Why it happened
Growth and guidance
On the earnings call, as summarised in an Investing.com transcript report, management raised its FY27 AUM growth expectation to 26-27%, above its usual 23-25% range, which it kept as the medium-term target. It kept its targets of 60-62 million new loans and 18-20 million new customers for the year.
Credit costs held down
Loan losses and provisions were 1.56% of average assets under finance, compared with 1.88% a year earlier, according to the same report. Excluding an extra management and macroeconomic overlay, management put the figure at about 1.32%. In June the company had reported 1.54%, or 1.31% excluding a ₹296 crore overlay. Management linked the overlay to weather risks, oil prices and inflation. It attributed the rise in GNPA mainly to the calendar (more days in the quarter push more accounts past 90 days overdue) and to slow growth in its MSME book, which it said expanded only about 3%.
Funding and margins
Cost of funds was 7.87%, down 9 basis points from June, but management told analysts it expected further increases in policy rates this year and a “marginal” further narrowing of net interest margins. Deposits were ₹69,754 crore, about 14% of consolidated borrowings, according to Upstox. The rest comes mainly from bank loans and bond markets, which makes the company sensitive to wholesale rates.
How it affects India and businesses
Bajaj Finance is a large lender to consumers buying electronics, two-wheelers and other goods on instalments, and a growing lender against gold, property and to small businesses. Strong loan numbers suggest household demand for credit stayed firm in the quarter despite high oil prices and rising rates.
The business model depends on scale: about 129 million customers, of whom about 82 million are eligible for cross-selling. That spreads technology and collection costs over a very large base. Retailers and manufacturers that rely on point-of-sale financing benefit when such lenders keep growing.
The capital raise is the other half of the story. As Business Today reported on 5 October, the board approved up to ₹11,700 crore through a qualified institutions placement and up to ₹5,800 crore through convertible warrants to promoter Bajaj Finserv, subject to approvals. HSBC estimated in that report that the share count would rise about 3% and return on equity could settle around 19-20% in FY27-FY29, compared with 20.6% reported this quarter. More capital supports faster growth but spreads profits over more shares.
Unlike banks, which move to expected credit loss (ECL) provisioning in April 2027, NBFCs such as Bajaj Finance already use expected-loss models under Indian accounting standards, so the overlays reported here are on top of an existing ECL framework.
Who is more or less exposed
As general patterns, not views on any single stock:
- Better placed: large lenders with diversified funding, high capital and low credit costs, which can keep growing as rates rise.
- More exposed: smaller NBFCs that rely heavily on bank and bond funding, and unsecured lenders, if rates rise further and repayment weakens.
- Consumer businesses: electronics, appliance and two-wheeler sellers benefit while financing stays easy, and would feel any tightening quickly.
Scenarios to watch
These are conditional scenarios, not predictions.
| Scenario | What would have to happen | Likely direction for consumer lenders |
|---|---|---|
| Growth holds | Festive demand stays strong, GNPA stays near current levels, capital raise completes | Faster AUM growth with slightly lower returns on equity |
| Margin squeeze | Policy and bond rates rise more than expected while loan rates lag | Narrower margins and slower profit growth |
| Credit stress | Weak monsoon effects, high oil prices and inflation hurt small borrowers | Overlays used up, higher loan losses, slower lending |
What to watch next
- Shareholder approval, pricing and timing of the QIP and warrants.
- Whether GNPA falls back in the December quarter, as management suggested when attributing the rise to day-count effects.
- MSME loan growth, which management expects to return to double digits in the second half.
- Gold-loan asset quality after the company stopped short-tenor schemes in August.
- RBI’s final rules on revolving credit and insurance commissions, which management said are still pending.
Bottom line
Bajaj Finance’s September quarter showed faster loan growth, profit up close to 29% and a higher growth target, supported by low credit costs and a cushion of extra provisions. The trade-offs are a small rise in bad-loan ratios from June, margin pressure if rates rise, and dilution from a planned ₹17,500 crore equity raise. How the festive quarter’s loans perform will show whether the faster pace can be kept.
Method: this article compares Bajaj Housing Finance’s NSE filing and Bajaj Finance’s Q1 FY27 investor presentation with reporting from Upstox, Investywise, Free Press Journal, Investing.com, Business Today and Whalesbook. Management comments come from Investing.com’s earnings call report. Standalone and consolidated figures are labelled. Scenario descriptions are FutureKnowledge analysis.