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Informist, Monday, Apr. 27, 2026

--Bajaj Housing: May see margin compression in FY27 

--CONTEXT: Comments by Bajaj Housing mgmt in post-earnings analyst call 

--Bajaj Housing: See cost of funds falling 2-3 bps in Q1 

--Bajaj Housing: See return-on-assets compression of 10 bps in FY27 

--Bajaj Housing: Want FY27 loan growth to be higher than FY26

By Priyasmita Dutta and Meera Nair 

NEW DELHI/MUMBAI – Even as it faces heat in the home loan business, Bajaj Housing Finance Ltd. sees only slight margin compression in the financial year 2026-27 (Apr-Mar) compared to FY26, the non-banking financial company said Monday. "Through the year, we will see some contraction in the margin, which will get partially offset by OPEX (operating expense) efficiency and partially offset by lower loan losses," the company's Managing Director Atul Jain said in a post-earnings analyst call. 

The housing sector financier's net interest margin was 3.8% in the March quarter, lower than 4% both in the December quarter and the March quarter last year. A decline in the net interest margin will result in the company's return-on-assets declining 10 basis points to 2.2% from 2.3% at the end of FY26, Jain said. But he said that "there are many ifs and buts" in that equation. 

"If there is a policy rate change from the regulator, we generally will not have an impact because then the ability to pass on will be there," he said. "We are assuming a scenario where the money market rates are higher, but the policy rates are not moved up, so our ability to pass through is not there," he added. 

Financial results released earlier in the day showed the home loan company posted an over 14% on-year rise in its net profit for the March quarter, driven by a 15% rise in its net interest income. Assets under management of the company rose 23% on year to INR 1.41 trillion in the March quarter. Monday, shares of the company closed at INR 91.07 on the National Stock Exchange, up 2% from the previous close. 

"We remain significantly upbeat and significantly in the growth mode. We want to grow much faster than what is there, and which is either in line with what we have been doing or even grow a bit faster than what we have grown during the last year, as far as the current year is concerned," Jain said. 

The company's management also said that a minor reduction in cost of funds - by about 2-3 bps - can also be expected in Apr-Jun compared to Jan-Mar. Bajaj Housing's cost of funds was 7.3% end of the March quarter, broadly unchanged from the December quarter but lower than 7.9% in Jan-Mar last year. "On a sequential basis, COF (cost of funds) witnessed a moderation of 4 bps on account of rate transmission on existing borrowings, partially offsetting the impact of incremental money market borrowings at a higher rate," the management said. 

The 2-3 bps of reduction in cost of funds will be due to the reset of the borrowing portfolio, the management added. "Partially, it will get offset from a higher cost of new borrowing in quarter 1 (Apr-Jun), which we are seeing in the current market. But still, at an overall level, we should see a minor reduction in the cost of funds in quarter 1 (Apr-Jun) from quarter 4 (Jan-Mar)."   End

Edited by Deepshikha Bhardwaj

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