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Informist, Thursday, Jul. 30, 2026

By Kabir Sharma and Nandini Sinha

MUMBAI – Bajaj Finance expects the war in West Asia to create some inflationary pressure going forward, although the company maintained that its funding costs are likely to remain broadly range-bound and reiterated confidence in its balance sheet strength, senior management said during the company's post-June quarter analyst call. 

Management said the company does not foresee any need to raise fresh capital in the near future despite strong business growth, and instead plans to first reduce its stake in Bajaj Housing Finance to the regulatory requirement of 75% from the current 86.7%. It added that the housing finance subsidiary stake sale would be the first step before evaluating any future capital raising, if required. 

The company also expects net interest margins to moderate by around 10-15 basis points over the coming quarters, while indicating that it would review its broader financial guidance after another quarter of performance. Management said it preferred not to revise guidance after a single strong quarter despite acknowledging that the business was performing ahead of earlier expectations.

On funding costs, Bajaj Finance said incremental borrowing costs have risen as fixed-income market yields have moved higher. It cautioned that any prolonged West Asia crisis could prove inflationary, while an uneven monsoon also remains a risk. However, executives said they expect overall funding costs to remain largely stable with only a slight upward bias.

Management said it had created an additional macroeconomic provision during the quarter because of geopolitical developments and monsoon-related uncertainty as part of its strategy to further strengthen the balance sheet. The company reiterated that it intends to remain among the most resilient financial institutions in India by maintaining conservative provisioning and risk standards. 

Bajaj Finance also expressed confidence about growth prospects across its retail lending businesses, highlighting strong momentum in small-ticket financing. Management said smartphone financing continues to register healthy growth of about 20-23% despite industry-wide weakness in handset shipments, helped by deeper customer penetration, higher affordability financing and a rise in average ticket sizes driven partly by premium devices such as Apple smartphones. 

The company said it expects continued growth in small-ticket loans, including smartphone financing, as it leverages its expanding customer franchise and distribution network to improve penetration across existing customers. Existing-to-bank customers now account for around 63% of such business, which management expects will further lower acquisition costs over time. 

To support long-term expansion, Bajaj Finance said it will continue to expand its physical distribution network by adding about 170-200 branches every year, after concluding that further distribution expansion remains necessary despite already having a large nationwide presence. Management said the company has identified around 160 new branches for the current year and views branch expansion as a key driver of future business growth. 

Executives also reiterated that the company's strategy remains centred on customer acquisition, artificial intelligence-led productivity improvements and digital transformation. They said continued investments in customer-centric technology, artificial intelligence and design capabilities are expected to lower customer acquisition costs, improve operating efficiency and reduce credit costs over the longer term while sustaining profitability.

The lender reported a consolidated net profit of INR 59.86 billion, up 27% on year. Thursday, shares of Bajaj Finance closed marginally lower at INR 1,053.50 apiece on the National Stock Exchange.  End

Edited by Deepshikha Bhardwaj

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