Bajaj Finance is expected to report a 29% year-on-year (YoY) rise in consolidated net profit for the September quarter, supported by strong loan growth and higher interest income, according to an average of estimates from five brokerages. However, rising borrowing costs and pressure on lending margins could partly offset the gains, with analysts closely watching management's commentary on profitability and asset quality.
The non-banking financial company is likely to report a net profit of around Rs 6,383 crore for the July-September quarter, compared with Rs 4,948 crore in the corresponding period last year, based on the brokerage consensus.
Net interest income (NII), the difference between interest earned and interest paid, is expected to grow 24% YoY to Rs 13,373 crore from Rs 10,785 crore a year earlier.
Bajaj Finance is scheduled to announce its second-quarter results on Monday, October 19.
The earnings come after the lender reported strong growth in assets under management (AUM) in its provisional business update earlier this month, suggesting continued demand across its lending businesses.
AUM increased 26.5% year-on-year to approximately Rs 5.85 lakh crore as of September 30, 2026, compared with Rs 4.62 lakh crore a year earlier. The company added around Rs 37,800 crore to its loan book during the quarter.
Its customer base expanded to 12.89 crore from 11.06 crore a year earlier, while new loans booked rose 11% to 1.35 crore.
Strong AUM growth to support earnings
Brokerages expect Bajaj Finance's expanding loan portfolio to remain the primary driver of earnings growth, with newer businesses contributing to the momentum.
PL Capital highlighted the company's 26.5% growth, pointing to emerging opportunities in businesses such as gold loans and microfinance.
The expansion comes as Bajaj Finance looks to diversify its lending portfolio and deepen its presence in newer segments alongside its established consumer finance, personal loan and commercial lending businesses. The company's deposit book stood at Rs 69,750 crore at the end of September.
The brokerage said management's commentary on the future trajectory of margins and credit costs would be among the key factors to watch when the company announces its results. PL Capital also expects pressure on margins, citing an increase in the cost of funds following a rise in bond yields.
The brokerage expects some moderation in net interest margins during FY27, even as strong loan growth supports interest income. Higher funding costs can affect the profitability of non-bank lenders, particularly when increases in borrowing rates cannot be immediately passed on to customers.
Credit costs and asset quality in focus
Nomura sees a modest improvement, projecting a seven-basis-point sequential moderation in credit costs.
PL Capital, meanwhile, estimates credit costs at around 1.6%, broadly in line with the other brokerage forecasts. The relatively stable credit-cost expectations suggest that analysts anticipate continued growth in lending without a substantial deterioration in asset quality.
However, the performance of unsecured consumer loans, microfinance and other higher-yielding segments will remain important as the company expands its portfolio.
Disclosure: This article has been written by Podishetti Akash, who is not a SEBI-registered Research Analyst or an Investment Adviser. Podishetti Akash and his ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclosures here.
