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Informist, Tuesday, Jul. 28, 2026

 

By Kabir Sharma

 

MUMBAI – Bajaj Finance Ltd. is expected to report strong earnings growth for the June quarter, supported by healthy expansion in assets under management, sustained customer acquisition and resilient loan demand across retail lending segments. While business momentum is likely to remain robust, investors will closely monitor whether elevated funding costs continue to weigh on net interest margin and if the moderation in credit costs seen in recent quarters is sustainable.

 

The average of estimates from 12 brokerages suggests Bajaj Finance will report net interest income of INR 126.73 billion, up 23.9% from a year earlier and 7.6% higher than the March quarter. Consolidated net profit is expected at INR 58.71 billion, reflecting growth of 24.9% on year and 7.4% sequentially.

 

Among the brokerages tracked, YES Securities has the highest estimate for net interest income at INR 150.47 billion, while Prabhudas Lilladher has the lowest forecast at INR 122.52 billion. For net profit, the highest estimate is at INR 60.26 billion from Nirmal Bang Equities, and the lowest estimate is at INR 57.33 billion from Antique Stock Broking.

 

The company's business update for the quarter indicated that growth momentum remained intact despite a challenging operating environment. Assets under management rose 24% from a year ago to around INR 5.47 trillion, while sequential growth stood at 7.2%, reflecting healthy demand across key lending segments. Analysts believe the strong expansion in the loan book will once again be the primary driver of earnings growth during the June quarter.

 

Loan origination trends also remained encouraging. Bajaj Finance booked 16.1 million new loans during the June quarter, an increase of 20% from a year ago, while adding nearly 5 million new customers. The total customer franchise expanded to 124.4 million. Brokerages believe the steady increase in customers and loan volumes provides confidence that the lender continues to gain market share despite heightened competition in retail credit.

 

Despite robust business expansion, net interest margin is expected to remain under pressure. Borrowing costs have stayed elevated amid tight liquidity conditions during much of the June quarter, and analysts expect the increase in funding costs to offset a large part of the benefit from better loan pricing. While some brokerages expect lending yields to improve sufficiently to keep spreads broadly stable, the broader consensus is that margin could either remain flat or decline marginally on a sequential basis.

 

Several analysts expect spreads to remain close to 8.5%, with higher yields on advances compensating for the rise in the cost of borrowings. Others expect net interest margin to decline by around five basis points sequentially as funding costs continue to normalise only gradually. The trajectory of margin over the coming quarters will, therefore, remain one of the key issues investors will seek clarity on during the earnings call.

 

Asset quality is expected to remain stable, with analysts projecting credit costs of around 1.7-1.8% of average assets under management during the quarter. Although credit costs remain above the levels seen before stress emerged in the unsecured retail portfolio, brokerages believe the worst of the asset quality deterioration is behind the company. Its gross and net non-performing assets ratios as of Mar. 31 were 1.01% and 0.41%, respectively, against 0.96% and 0.44% a year ago.

 

Management's comments on the health of the unsecured lending portfolio will be closely tracked, particularly after the Reserve Bank of India's rollback of higher risk weights on unsecured consumer loans earlier this year. 

 

Funding costs and liquidity management will also remain important discussion points. Although liquidity conditions have improved in recent months following policy measures by the Reserve Bank of India, the benefit is expected to flow into borrowing costs only gradually. Investors will, therefore, watch management's assessment of the funding environment and its expectations for margin over the rest of the financial year.

 

Commentary on the outlook for net interest margin, the pace of improvement in credit costs, competitive dynamics in retail lending and the growth trajectory of newer businesses will be critical. Bajaj Finance will detail its June quarter results Thursday. At 1118 IST, its shares were trading 1% higher at INR 1,059.10 on the National Stock Exchange. The stock is up 13% since it announced its March quarter earnings on Apr. 29.

 

Of the 14 reports on the company available with Informist, 10 have a "buy" rating on the stock at an average target price of INR 1,133 per share. This is over 8% higher than the current market price. Two brokerages have a "hold" recommendation, while the remaining two brokerages have a "sell" rating on the stock.

 

Following are the June quarter earnings estimates for Bajaj Finance from 12 brokerages in descending order of the estimate of net profit in INR billion:

 

Brokerage	Net interest income	Net profit
Nirmal Bang Equities Pvt Ltd.	125.55	60.26
PhillipCapital (India) Pvt Ltd.	126.05	60.13
YES Securities (India) Ltd.	150.47	60.00
Nomura Equity Research	123.85	58.97
Kotak Securities Ltd.	126.02	58.64
Bank of America global research	123.85	58.58
JM Financial Institutional Securities Pvt Ltd.	124.65	58.47
Motilal Oswal Financial Services Ltd.	124.65	58.41
Prabhudas Lilladher Pvt Ltd.	122.52	58.33
Nuvama Wealth Management Ltd.	123.48	57.89
Anand Rathi Share and Stock Brokers Ltd.	125.50	57.49
Antique Stock Broking Ltd.	124.21	57.33
Average	126.73	58.71

 

 

End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Himanshi Gupta

 

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