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Informist, Monday, Apr. 27, 2026

 

By Kabir Sharma

 

MUMBAI – Bajaj Finance Ltd. is expected to report healthy growth in net profit for the March quarter, supported by robust growth in interest income and assets under management and signs of moderation in credit costs, although margin trends and asset quality remain key areas of divergence among analysts.

 

According to an average of estimates from 10 brokerages, Bajaj Finance's net interest income for the March quarter is estimated at INR 122.80 billion, up 25% on year, and net profit is pegged at INR 54.40 billion, up over 21%. The highest estimate for net interest income is from YES Securities (India) Ltd. at INR 145.02 billion. The lowest is from ICICI Securities Ltd. at INR 107.91 billion. For net profit, Nirmal Bang Equities has the highest estimate at INR 63.29 billion while ICICI Securities again has the lowest estimate at INR 47.90 billion.

 

A surge in impairments on financial instruments, which led to a rise in expenses, had weighed on Bajaj Finance's bottom line for the December quarter. The non-banking finance company had reported a consolidated net profit of INR 39.78 billion for the quarter, down over 6% on year and over 18% sequentially.

 

Across the board, estimates suggest that Bajaj Finance will sustain its growth momentum, with assets under management likely to rise around 22% annually and 5–5.5% sequentially. This growth is expected to be driven by continued strength in retail lending, particularly in the consumer and the small and medium enterprise segments. Nirmal Bang Equities Pvt. Ltd. expects the lender's assets under management to reach about INR 5 trillion, highlighting that secured lending segments are likely to have outperformed its unsecured book during the quarter. The lender's consolidated assets under management grew 22% on year to INR 4.86 trillion as of Dec. 31.

 

However, not all indicators are uniformly strong. Nomura Equity Research points out that customer addition in the pre-quarter update was the lowest in seven quarters, indicating a potential moderation in incremental growth momentum. As of Dec. 31, the financier's customers were at 115.40 million, a growth of 19% on year.

 

In terms of margins, Kotak Securities Ltd. expects the non-bank lender's spreads to remain largely flat sequentially at around 8.6%, as the benefit of higher lending yields is expected to be offset by a marginal increase in the cost of borrowings. In contrast, Motilal Oswal Financial Services Ltd. anticipates a slight compression in margin of about 5 basis points on quarter, with the net interest margin being around 9.5%. Nomura echoes this view, expecting mild pressure on the net interest margin on a sequential basis.

 

Nirmal Bang, however, forecasts margin expansion, estimating the net interest margin at 10.7% compared with 10.0% in the previous quarter. This improvement is attributed to the repricing of fixed-rate loan portfolios and a moderation in cost of funds. Meanwhile, Prabhudas Lilladher expects the margin to remain broadly stable, noting that while funding costs may ease, part of the benefit could be passed on to customers, thereby limiting the margin expansion.

 

The financier's fee income is expected to be a key growth driver during the quarter. Kotak Securities projects strong 24% year-on-year growth in fee income, which should provide meaningful support to overall revenue and help cushion any pressure arising from margin compression. 

 

Asset quality trends are expected to show signs of stabilisation. Most brokerages estimate credit costs in the range of 1.9–2.1%, indicating moderation from levels seen in previous quarters. Kotak Securities pegs credit costs at 1.93% while Motilal Oswal and Nirmal Bang also expect a normalisation trend, noting that stress in the unsecured lending portfolio may have peaked and is gradually easing.

 

However, some caution persists. Prabhudas Lilladher flags potential stress in the micro, small, and medium enterprises segment, warning that recovery timelines could be extended because of external factors, including geopolitical uncertainties such as the conflict going on in West Asia.

 

Investors will closely track management commentary on the net interest margin trajectory, credit cost normalisation, customer acquisition trends, and segmental stress, as these factors will shape the outlook for FY27, brokerages said.

 

Of the 13 brokerage reports on Bajaj Finance available with Informist, nine have a "buy" recommendation on the stock, three have a "hold" call, and one says "sell". The average target price of the "buy" recommendations is INR 1,132, nearly 23% higher than the current price. Monday, shares of Bajaj Finance closed flat at INR 921.80 on the National Stock Exchange. 

 

The following are the Jan-Mar earnings estimates, in INR billion, for Bajaj Finance from 10 brokerages in descending order of the net profit estimate:

 

BROKERAGE	NET INTEREST INCOME	NET PROFIT
Nirmal Bang Equities Pvt. Ltd.	132.58	63.29
JM Financial Institutional Securities Pvt. Ltd.	118.97	57.01
Motilal Oswal Financial Services Ltd.	118.33	56.33
YES Securities (India) Ltd.	145.02	55.48
Prabhudas Lilladher Pvt. Ltd.	120.43	55.41
Nomura Equity Research	117.64	54.70
Kotak Securities Ltd.	118.24	54.00
Anand Rathi Share and Stock Brokers Ltd.	134.35	50.68
Emkay Global Financial Services Ltd.	114.55	49.19
ICICI Securities Ltd.	107.91	47.90
Average	122.80	54.40

 

End

 

Edited by Rajeev Pai

 

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