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Bajaj Finance Posts 24% AUM Growth and 28% Profit Surge in Q1 FY27
Bajaj Finance Limited (BFL) announced a robust first‑quarter performance for fiscal year 2026‑27, with assets under management (AUM) rising 24 percent year‑on‑year to ₹546,944 crore and consolidated profit after tax climbing 28 percent to ₹6,100 crore.
The uptick in earnings was driven by a surge in core lending activities. Consumer financing grew by more than 40 percent, while gold loans doubled, posting a 112 percent jump. Commercial vehicle and tractor loans also doubled, rising 102 percent. Micro, small and medium‑enterprise (MSME) lending saw a modest 2 percent increase, and new loan bookings reached 16.1 million—a 25 percent quarter‑on‑quarter rise.
Financial metrics reflected a healthy balance sheet. Net interest margin (NIM) edged up to 9.5 percent, supported by a 10 basis‑point rise in yields and a 6 basis‑point increase in the cost of funds. Credit costs held steady at 1.5 percent, in line with guidance, and gross non‑performing assets (NPA) fell to 0.96 percent, down 5 basis points from the previous quarter. Net NPA improved to 0.39 percent, a 2‑basis‑point gain.
Management reaffirmed its outlook for FY27, targeting 22‑24 percent AUM growth and a return on equity (RoE) of 20‑21 percent. The company plans to add 18‑20 million new customers and 60‑62 million new loans over the full fiscal year, while trimming operating expenditure by 25‑40 basis points relative to FY26.
A cornerstone of the strategy is the FinAI transformation. Bajaj Finance has deployed 400 workers in its artificial‑intelligence unit and intends to add 300 more to its digital platforms. The AI‑driven text‑and‑bot system generated ₹2,500 crore in disbursements during Q1FY27 and is expected to reach ₹11,000‑12,000 crore by year‑end. Digital channels now account for 25 percent of gold loan disbursements and 17‑18 percent of personal loan disbursements.
Customer growth remains strong. The company’s customer base reached 124 million, up 17 percent year‑on‑year. Branch expansion continues, with 194 new gold‑loan branches added in the quarter, bringing the total to 1,701. Management projects closing FY27 with 2,700‑2,800 gold‑loan branches and 520‑550 micro‑finance (MFI) branches.
Asset‑quality improvements underpin the firm’s cost advantage. Credit costs are expected to stay flat or rise slightly, while the cross‑selling model and digital efficiencies are projected to keep net NPA low. FY27 guidance includes a 10‑15 basis‑point compression in NIM.
In sum, Bajaj Finance’s Q1FY27 results showcase solid growth across all lending segments, a tightening balance sheet, and a clear focus on digital and AI‑enabled expansion. The company’s optimistic FY27 guidance remains in place, with potential for upward revision if current trends persist. Investors will monitor the upcoming earnings release for any adjustments to guidance, as well as progress on FinAI initiatives and branch‑network expansion.
The uptick in earnings was driven by a surge in core lending activities. Consumer financing grew by more than 40 percent, while gold loans doubled, posting a 112 percent jump. Commercial vehicle and tractor loans also doubled, rising 102 percent. Micro, small and medium‑enterprise (MSME) lending saw a modest 2 percent increase, and new loan bookings reached 16.1 million—a 25 percent quarter‑on‑quarter rise.
Financial metrics reflected a healthy balance sheet. Net interest margin (NIM) edged up to 9.5 percent, supported by a 10 basis‑point rise in yields and a 6 basis‑point increase in the cost of funds. Credit costs held steady at 1.5 percent, in line with guidance, and gross non‑performing assets (NPA) fell to 0.96 percent, down 5 basis points from the previous quarter. Net NPA improved to 0.39 percent, a 2‑basis‑point gain.
Management reaffirmed its outlook for FY27, targeting 22‑24 percent AUM growth and a return on equity (RoE) of 20‑21 percent. The company plans to add 18‑20 million new customers and 60‑62 million new loans over the full fiscal year, while trimming operating expenditure by 25‑40 basis points relative to FY26.
A cornerstone of the strategy is the FinAI transformation. Bajaj Finance has deployed 400 workers in its artificial‑intelligence unit and intends to add 300 more to its digital platforms. The AI‑driven text‑and‑bot system generated ₹2,500 crore in disbursements during Q1FY27 and is expected to reach ₹11,000‑12,000 crore by year‑end. Digital channels now account for 25 percent of gold loan disbursements and 17‑18 percent of personal loan disbursements.
Customer growth remains strong. The company’s customer base reached 124 million, up 17 percent year‑on‑year. Branch expansion continues, with 194 new gold‑loan branches added in the quarter, bringing the total to 1,701. Management projects closing FY27 with 2,700‑2,800 gold‑loan branches and 520‑550 micro‑finance (MFI) branches.
Asset‑quality improvements underpin the firm’s cost advantage. Credit costs are expected to stay flat or rise slightly, while the cross‑selling model and digital efficiencies are projected to keep net NPA low. FY27 guidance includes a 10‑15 basis‑point compression in NIM.
In sum, Bajaj Finance’s Q1FY27 results showcase solid growth across all lending segments, a tightening balance sheet, and a clear focus on digital and AI‑enabled expansion. The company’s optimistic FY27 guidance remains in place, with potential for upward revision if current trends persist. Investors will monitor the upcoming earnings release for any adjustments to guidance, as well as progress on FinAI initiatives and branch‑network expansion.
