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Informist, Thursday, Nov. 6, 2025

--Bajaj Housing Finance: See AUM growth picking up as disbursements grow

--Bajaj Housing Fin: See cost of funds decline 10 bps in Q3

By Priyasmita Dutta and Simran Rede

NEW DELHI/MUMBAI – Bajaj Housing Finance Ltd. expects cost of funds to decline 10 basis points in Oct-Dec on another round of rate cut by the Reserve Bank of India's Monetary Policy Committee, its management said in a post-earnings analyst call. At the end of the September quarter, the company's cost of funds was 7.4%, 34 bps lower on quarter and 50 bps lower on year.

The central bank's rate-setting panel has lowered the repo rate by 100 bps to 5.50% so far in 2025.

The company expects net interest margin to moderate by 15-20 bps due to reduction in investment income which in FY25 was higher due to two rounds of capital raises and lower income on derecognised loans due to lower assignment planned in FY26. Net interest margin at the end of the September quarter was 4%, unchanged from previous quarter.

Earlier Thursday, Bajaj Housing Finance reported a net profit of INR 6.43 billion for the September quarter, up nearly 18% on year to due to strong growth in net interest income. Sequentially, the non-banking company's profit was up over 10%. The company's interest income rose over 17% to INR 26.14 billion during the quarter under focus. Shares of the non-bank financial company closed 0.2% lower at INR 109.38 on the National Stock Exchange.

Speaking on the effect of another round of rate cut on margins, Bajaj Housing Finance's senior management said the company maintains the projection of 15-20 bps reduction in margin – given in Apr-Jun - despite only now factoring in a rate cut. "In that sense, if last quarter we were projecting this number, without the rate cut, at the end of this quarter, we are projecting the same margin with one rate cut. Based on the number, to that extent, you can quantify that as our improvement in confidence on the margins over one quarter," they said.

Despite the benefit on cost of fund, which would be marginal, if the portfolio attrition pressure continues to remain the current way, it may see the pressure on the yields continuing, the non-banking financial company said. "Continued hyper competitive intensity in the prime home loans segment resulted in higher portfolio attrition," it said.

Going forward, however, as disbursements pick up, the company's assets under management will improve, the management said. At the end of September, its AUM grew 24% on year to INR 1.27 trillion. Home loans made up over 55% of its portfolio.  End

Edited by Ashish Shirke

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