This wasn't just another earnings report—it was a celebration.
Bajaj Finance turned heads this quarter, not just with strong profits, but also with a stock split, a generous bonus issue and a special dividend.
It was a shower of rewards for shareholders.
But once the confetti settles, investors need to ask: is the core growth story as bulletproof as the bonuses suggest? Especially with margin pressures building and unsecured loans piling up.
Numbers that dazzle
The headline numbers were impressive:
- Profit after tax (PAT) jumped 19 per cent year-on-year to Rs 4,546 crore, slightly above street estimates.
- Net Interest Income (NII) rose 22 per cent to Rs 9,807 crore, reflecting continued strong lending momentum.
- Assets under management (AUM) expanded 26 per cent to Rs 4,16,750 crore, led by booming demand for unsecured personal loans, consumer durable loans and two-wheeler finance.
The company also added 4.7 million new customers in the quarter, pushing its franchise to over 101 million users. Deposits grew 19 per cent year-on-year, strengthening its liability side.
In short, Bajaj Finance continues to execute at scale—something very few NBFCs can boast about.
Sweeteners for shareholders
Bajaj Finance rolled out several investor-friendly moves:
- Stock split (1:2): Making the stock more affordable for small investors.
- Bonus issue (4:1): Enhancing liquidity and perceived value.
- Special interim dividend (Rs 12/share): Funded by the recent gains from the Bajaj Housing Finance stake sale.
These gestures signal management's confidence—and perhaps a desire to widen the investor base ahead of bigger ambitions.
Cracks beneath the surface?
Not everything was picture-perfect, though. Margins, a key profitability metric, showed signs of stress.
Analysts had already flagged higher funding costs and intensifying competition as threats, and the Q4 numbers confirmed slight compression in net interest margins (NIMs). This isn't just a one-off worry: in a rising rate environment and with other NBFCs like Shriram Finance and Aditya Birla Capital aggressively lending, margin defence could get trickier.
There's also the growing tilt towards unsecured loans. While high-yielding, these loans are riskier during economic slowdowns. Bajaj Finance's asset quality remains stable for now, but any cracks could widen quickly if repayment behaviour worsens.
The bigger picture
Management remains upbeat. Guidance for FY26 includes steady AUM growth, continued customer acquisition and deeper digital integration (including solar and EV financing expansions).
But execution will be key. Scaling unsecured lending while keeping credit costs in check is a tough balancing act, especially when competition is sharpening its knives.
Risks to watch
- NIM pressure if borrowing costs stay high.
- Unsecured loan concentration risk.
- Regulatory changes tightening NBFC norms.
- Macro shocks that could hurt discretionary spending and asset quality.
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