Bajaj Finance Q2 adds ₹37,680 crore AUM and 29% profit growth

Bajaj Finance, the lender that cross-sells consumer, personal, MSME and mortgage loans to mass and affluent households, filed its Q2 FY27 investor presentation on 19 October 2026. Consolidated assets under management rose 26% to ₹584,624 crore and profit after tax rose 29% to ₹6,367 crore, while the board separately approved a capital raise of up to ₹17,500 crore . The quarter shows core credit costs falling even as growth ran above its long-term corridor .

Profit grew faster than loans as core provisions fell

Income growth held up while underlying loan losses declined, so profit outpaced balance-sheet growth. Reported provisions rose only slightly because a prudential overlay hid a fall in core provisions .

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Net interest income means interest earned less interest paid. Excluding the ₹337 crore management and macro-economic overlay, provisions fell 12% and profit before and after tax each grew 34% . Efficiency was flat on the year, with a 25-40 basis points improvement guided for FY27 . Returns stayed inside the long-term construct of 4.3%-4.7% for assets and 19%-21% for equity . In Q1 FY27 profit had grown 28% with returns at the top of that range, and management said momentum looked better than March guidance but asked to wait another quarter before revising .

AUM ran above corridor as mortgages and gold led growth

Consolidated growth of 26% sits above the reiterated 23%-25% corridor, after a second straight quarter of near-record additions .

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The Q2 addition was ₹37,680 crore, following ₹36,969 crore in Q1 FY27 to ₹546,944 crore from a FY26 base of ₹509,975 crore . The consolidated lending mix was 30% urban, 12% rural, 13% MSME, 13% commercial and 32% mortgages .

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Mortgages remain the largest block, with home loans up 22%, loan against property up 43%, lease rental discounting up 43% and developer finance up 13% . Gold more than doubled and lifted its share to 4.14% from 2.55% . MSME was the outlier after deliberate pruning since last July, with recovery expected by Q3 FY27 . The run-down captive two- and three-wheeler book fell 66% to ₹2,387 crore . In Q1, management said about half the consumer strength was higher ticket prices and half was volume .

Loan and customer additions stayed strong despite festival shift

Volume growth is clouded by timing, but franchise compounding continued. The company said year-on-year loan volume is not comparable due to early onset of festival season last year .

Sources: Q2 FY27, Q2 FY26 — ; Q1 FY27 — .

The company expects to disburse 6-6.20 crore loans and add 1.80-2 crore customers in FY27 . Cross-sell franchise, customers eligible for more products, stood at 8.24 crore . In Q1, existing-customer share had risen to about 63% from 60%, which supports lower credit cost .

Bad loans improved on year; Stage 2 gold balances rose

Gross bad loans, loans overdue over 90 days, and net bad loans after provisions improved year on year but ticked up sequentially . Separately, the company highlighted a transitional increase in Stage 2 gold loans .

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Stage 2 and 3 balances rose ₹1,601 crore to 2.02% of loans from 1.87%, including ₹1,047 crore from short-tenor gold schemes that are no longer offered . The company expects no credit-cost impact from that shift. On its measure adjusted for the transient movement in gold loans, the combined Stage 2 and 3 ratio improved to 1.88% from 1.90% in Q1 FY27 . Gold-loan provision cover was 0.67% for Stage 2 and 5.00% for Stage 3. The low Stage 2 cover diluted the blended Stage 2 ratio to 38.79%; excluding gold, that ratio was 48.03% . Annualised loan loss to average finance assets was 1.56% against 1.88%, and 1.32% excluding the overlay . Vintage performance across 3, 6 and 9 months on book keeps improving, and management is optimistic on FY27 credit costs . In Q1 vintages were already below the pre-Covid FY20 benchmark . The April deck guided FY27 net loan loss to 1.45%-1.60% .

Housing and broking arms added steady profit

Both subsidiaries grew assets and profit, with housing crossing ₹1.5 lakh crore .

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Housing disbursements rose 25% to ₹19,935 crore, net interest income grew 10% to ₹1,055 crore, costs to income improved to 19.1% from 19.7%, and gross and net bad loans were 0.29% and 0.12% . Broking AUM grew 59% to ₹12,058 crore, split as margin funding of ₹10,498 crore and ESOP financing of ₹1,560 crore, with costs to income improving to 45.6% from 51.1% . The three blocks plus associates broadly tie to consolidated profit, with small consolidation differences . In Q1, housing had its highest-ever quarterly addition while broking profit growth was softer at 22% .

Funding costs eased while new capital builds buffer

Consolidated cost of funds was 7.31%, improving 9 basis points over Q1 FY27 and extending a decline from 7.97% in March 2024 . Standalone cost was 7.40% and housing cost was 7.04%, down 17 basis points sequentially . In Q1, management expected costs to stay range-bound with slight upward bias and saw 10-15 basis points margin moderation for FY27 .

Liquidity buffer was ₹19,995 crore, deposits were ₹69,754 crore at 14% of consolidated borrowings, and daily liquidity coverage was 214% for the parent and 146% for housing against 100% required . Behavioural gaps stayed positive in near-term buckets for both lenders .

Capital adequacy was 20.33% with Tier-1 at 19.43%, against 21.6% in FY26, while consolidated leverage was 5.1 times against 4.8 times in FY26 . The company uses 5-5.5 times for resilience planning . On 1 October 2026 the board approved, subject to shareholders, fresh shares up to ₹11,700 crore via qualified institutions placement and warrants up to ₹5,800 crore to promoter Bajaj Finserv, citing India growth, business momentum and resilience across capital, talent, technology and provisioning . In July management had said first priority was to dilute housing from 86.7% toward 75% .

Cost-to-income ratio stayed broadly flat as branches and AI scaled work

The cost-to-income ratio was broadly stable while operating expenses rose 23% year on year to ₹5,275 crore and physical and digital capacity expanded . Full-time headcount was 75,845 after adding 2,584 in Q2, or 1,058 excluding gold and microfinance, with attrition at 15.1% . Presence was 4,091 locations with over 254,000 active points after adding 4,100 points, with 150-175 new locations planned in FY27 . Gold branches rose by 321 to 2,022 toward 2,700-2,800 by March, and microfinance branches were 480 toward 520-550 .

The company's FinAI transformation is framed as integrating AI across processes to drive operating leverage .

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Document auto-checks more than doubled and voice-to-data conversion reached 5.60 crore interactions . Targets for FY27 include 600-plus sub-agents under 250 autonomous agents across 118 use cases .

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Sources

1. 1 Investor Presentation for the quarter ended 30 September 2026.
2. 2 Earnings-call transcript, 2026-08-04
3. 3 Investor presentation, Jul 2026
4. 4 Investor presentation, Apr 2026