This article first appeared on GuruFocus .
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AUM Growth:23% increase, crossing INR 1,40,000 crore.
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Profit After Tax (PAT):Grew 14% to INR 669 crore; 20% growth excluding one-time tax benefit.
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OpEx to NTI Ratio:Improved to 19.2% from 21.8% in Q4 FY25.
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Gross NPA:Stable at 27 bps, improved from 29 bps year-on-year.
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Net NPA:Remained at 11 bps.
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Net Interest Margin:Dropped by 12 bps to 3.8% from 4% in Q3 FY26.
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Disbursements:Grew 23% year-on-year to INR 17,506 crore.
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Cost of Funds:Reduced by 60 bps to 7.3% from 7.9% in Q4 FY25.
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Net Interest Income:Grew 15% in Q4 FY26; 25% growth for the full year to INR 3,752 crore.
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Net Total Income:Increased by 20% year-on-year for the quarter; 23% growth for the full year to INR 4,391 crore.
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Return on Assets (ROA):2.3% in Q4 FY26, compared to 2.4% in Q4 FY25.
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Return on Equity (ROE):12.2% in Q4 FY26, compared to 12.1% in Q4 FY25.
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Branch Network:Expanded to 226 branches across 182 locations.
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Capital Adequacy Ratio (CAR):22.46%.
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Release Date: April 27, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Bajaj Housing Finance Ltd ( NSE:BAJAJHFL ) reported a strong AUM growth of 23% year-on-year, reaching INR 1,40,000 crore.
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The company maintained a stable asset quality with Gross NPA at 27 bps and Net NPA at 11 bps.
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Capital adequacy remains strong with CAR at 22.46%, well above the regulatory threshold.
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Net interest income grew by 15% in Q4 FY26, supported by higher fee and assignment income.
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The geographical network expanded to 226 branches across 182 locations, enhancing market reach.
Negative Points
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Net interest margin declined by 12 bps sequentially from 4% in Q3 FY26 to 3.8% in Q4 FY26.
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There was a moderation in portfolio yield by 14 bps due to lower acquisition pricing and portfolio attrition.
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The cost of funds remains a concern with a slight reduction of only 4 bps sequentially.
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The competitive intensity in the market led to a compression in home loan acquisition yields.
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The company anticipates some margin compression in FY27 due to the lower rate of new acquisitions compared to the higher rate of outgoing loans.
Q & A Highlights
Q: What is the current percentage of home loans in your portfolio, and how are prepayments affecting your book? A: The home loan percentage stands at 50.45%, which is a regulatory figure. Prepayments in Q4 were consistent with Q3, with a BT out rate of around 10% out of a total attrition of 20%. The non-home loan segment is growing faster due to industry trends and strategic focus.
Q: Can you explain the margin decline by 12 basis points and its impact on different product segments? A: The margin decline is mainly due to lower acquisition pricing and a 15 bps pass-through in our PLR in December. The decline was seen across home loans and non-home loans, with competitive intensity affecting acquisition prices. The mix change, particularly in construction finance and lease rental discounting, also played a role.
Q: What is your outlook on yield stability and cost of funds for the upcoming quarters? A: We expect slight compression in yields, with a marginal benefit on the cost of funds side. The current acquisition pricing remains stable, but we anticipate some contraction in margins throughout the year, partially offset by operational efficiencies and lower loan losses.
Q: How do you plan to manage the regulatory requirements for home loan percentages, and are there any plans for portfolio buyouts? A: We consistently meet the regulatory requirement of maintaining above 50% in home loans. While portfolio acquisitions and co-lending are options, they cannot significantly alter the home loan growth percentage. Our focus remains on organic growth in prime and suburb housing.
Q: How are you addressing the competitive intensity in the market, and what is your strategy for maintaining ROA? A: We anticipate some margin compression due to competitive intensity, but aim to offset this through cost efficiencies and better credit costs. Our medium-term ROA guidance is 2 to 2.2%, with a bias towards the upper end. We will provide a full-year assessment with the Q1 results.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
