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Informist,  Sunday, Feb. 1, 2026

By Kabir Sharma

MUMBAI – Bajaj Finance Ltd. is likely to report steady performance for the December quarter, supported by continued growth in assets under management and broadly stable margins, while credit costs are expected to ease marginally, according to brokerage estimates. The non-banking financial company is expected to maintain its growth momentum, with analysts expecting sustained traction in loan bookings and customer additions.

The non-bank finance company is expected to report a consolidated net interest income of INR 116.33 bln for the December quarter, down 12% sequentially and flat on year, according to the average of estimates from 10 brokerages. The company's net profit is estimated at INR 51.83 bln, up 22% sequentially and 6% on year, implying a steady year-on-year growth despite moderation in sequential income.

The highest estimate for net profit was INR 60.97 billion by Nirmal Bang Equities Pvt. Ltd. and the lowest was INR 44.53 billion by ICICI Securities Ltd. For net interest income, YES Securities (India) Ltd. gave the highest estimate at INR 138.75 billion and ICICI Securities gave the lowest at INR 101.79 billion. The non-bank financier is expected to report its earnings for the December quarter on Tuesday. 

Shares of the Nifty 50 constituent have fallen over 14% from the day it reported its earnings for the September quarter. The management has revised its growth guidance for 2025-26 (Apr-Mar) downward to 22-23% from 23-24% earlier in the previous quarter. On Sunday, shares of Bajaj Finance ended 3% lower at INR 902.35 on the National Stock Exchange.

Brokerages expect growth to be driven primarily by continued expansion in the company's loan book. Emkay Global Financial Services said Bajaj Finance has sustained strong balance sheet expansion and noted the company "saw steady quarterly growth, (Oct-Dec) with AUM (assets under management) reaching Rs4.9trn (INR 4.9 trillion), registering a growth of 5% QoQ and 22% YoY."

The robust growth in AUM is expected to be supported by strong customer acquisitions, brokerages said. Prabhudas Lilladher Institutional Equities highlighted the lender continued to expand its franchise during the quarter, with new loan accounts booked rising 15% year-on-year to 13.9 mln and customer additions of 4.8 mln, taking the total customer base to over 115 mln.

Bajaj Finance's assets under management rose 22% on year to INR 4.86 trillion as of Dec. 31. The non-banking finance company's assets under management grew INR 236 billion in the December quarter. 

Analysts expect the company's margins to remain broadly stable during the quarter, supported by easing cost of funds, although some brokerages have flagged the possibility of a slight contraction due to moderation in yields on advances. Emkay Global expects stability in profitability metrics, noting margins could remain "broadly stable or marginally improve on account of moderating CoFs (cost of funds)."

However, Motilal Oswal Financial Services anticipates some pressure on margins, estimating that margins may contract slightly on a sequential basis. The brokerage said margin is "likely to contract ~5bp QoQ to ~9.5%," and that management commentary on net interest margin trajectory will be closely tracked. 

Another key positive for the company in the reporting quarter is the expected moderation in credit costs, which have remained elevated in recent quarters amid stress in certain segments such as loans to the micro, small, and medium enterprises. Kotak Institutional Equities expects credit costs to decline to around 1.95% during the quarter compared with a 2.0–2.3% range seen in the previous four quarters.

Motilal Oswal also expects credit costs to decline 7 basis points sequentially to roughly 2%. Emkay Global expects credit costs to moderate sequentially to below 2%, adding that overall asset quality is likely to remain strong, with gross and net stage-3 assets expected around 1.2% and 0.6% of total assets, respectively.

Some brokerages remain cautious about asset quality in specific segments. Prabhudas Lilladher noted credit costs could remain somewhat elevated as the MSME segment continues to witness stress. "We have virtually cut MSME business by 25% in our unsecured MSME volumes. We now expect MSME business to grow in the current full fiscal by 10-12% only," Vice-Chairman and Managing Director Rajeev Jain had said in a call with analysts. 

Operating cost ratios are likely to remain stable as well, brokerages said. Kotak estimates the cost-to-average AUM ratio at 3.8%, down 20 basis points year-on-year but flat sequentially, and noted costs may be impacted by the implementation of new labour codes.

Investors are expected to closely monitor management commentary on the outlook for the margin, funding costs, trend of asset quality—particularly in MSME lending—and the sustainability of improvement in credit cost.

Brokerages will also watch for updates on pricing strategy and transmission of funding cost benefits to customers. Prabhudas Lilladher noted that the company is expected to pass on the benefits of lower cost of funds to borrowers, which could keep margins range-bound in the near term. 

Brokerages said they have not factored in any potential capital gains from the sale of stakes in subsidiaries, which could also provide a fillip to the company's bottom line. Out of the 9 brokerage reccomendations available for the lender, five have a 'Buy' rating with an average target price of INR 1,140. Three have a 'Hold' rating with an average target price of INR 1,130 and one has a sell rating with a target price of INR 1,000. 

Following are the Oct-Dec earnings estimates for Bajaj Finance from 10 brokerages in descending order of the estimate of net profit in INR billion:

End

Edited by Akul Nishant Akhoury

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