Bajaj Finance has raised its assets under management (AUM) growth guidance for the 2026–27 financial year to 26%–27%, up from its earlier target of 23%–25%, following strong business momentum during the first half of the year. The non-banking financial company reported a 26.5% year-on-year increase in AUM to approximately ₹5.85 lakh crore at the end of September 2026, prompting management to raise its full-year growth expectations.
The revised outlook follows a strong second quarter, with consolidated net profit rising 29% year-on-year to ₹6,367 crore and net interest income increasing 24% to ₹13,335 crore. However, the company expects some additional pressure on net interest margins as borrowing costs rise. While management remains confident about growth, it has retained its medium-term AUM growth target of 23%–25%, signalling that the stronger FY27 outlook does not automatically change its longer-term expectations.
Key Takeaways
- Higher growth guidance: Bajaj Finance now expects FY27 AUM growth of 26%–27%, compared with 23%–25% previously.
- AUM expansion: Assets under management reached approximately ₹5.85 lakh crore as of September 30, 2026.
- Profit growth: Consolidated net profit increased 29% year-on-year to ₹6,367 crore.
- Higher interest income: Net interest income rose 24% to ₹13,335 crore.
- New customer targets: The lender expects to add 18–20 million customers and book 60–62 million new loans during FY27.
- Margin pressure: Management expects borrowing-cost increases to cause some further moderation in net interest margins.
- Long-term targets unchanged: The company continues to target medium-term AUM growth of 23%–25% and long-term annual profit growth of 20%–25%.
Why Bajaj Finance Raised Its FY27 Growth Guidance
Bajaj Finance’s decision to increase its growth forecast reflects stronger-than-expected momentum across its lending operations during the first half of FY27.
The company’s AUM increased 26.5% year-on-year to around ₹5.85 lakh crore at the end of September. It added approximately ₹37,680 crore to its AUM during the September quarter, indicating continued expansion in its lending portfolio.
AUM measures the total value of loans and other assets managed by a financial institution. For a lender such as Bajaj Finance, sustained AUM growth can indicate that customer demand, loan disbursements and portfolio expansion are progressing at a healthy pace. However, AUM growth alone does not determine profitability because funding costs, operating expenses and loan losses also affect financial performance.
Management cited strong business momentum and the early onset of the festive season while updating its outlook. Consumer demand around festivals can support purchases financed through personal loans, consumer durable loans and other credit products.
The revised guidance suggests that Bajaj Finance expects the momentum seen in the first half of the financial year to continue. Nevertheless, the company must still manage credit quality and margins as it expands its loan book.
How much has the guidance changed?
| Metric | Earlier guidance | Revised guidance |
|---|---|---|
| FY27 AUM growth | 23%–25% | 26%–27% |
| Medium-term AUM growth | 23%–25% | Unchanged |
| Long-term annual profit growth | 20%–25% | Unchanged |
| Long-term return on equity target | 19%–21% | Unchanged |
The revised range represents an increase of 2–3 percentage points at the lower and upper ends, respectively. The headline change is therefore a higher growth forecast for FY27, rather than a revision to every long-term financial target.
Bajaj Finance Q2 FY27 Results: The Main Numbers
The September quarter delivered strong growth in both earnings and lending activity.
| Financial metric | Q2 FY27 | Year-on-year change |
|---|---|---|
| Consolidated net profit | ₹6,367 crore | +29% |
| Net interest income | ₹13,335 crore | +24% |
| Net total income | ₹15,974 crore | +23% |
| Consolidated AUM | ₹5.85 lakh crore | +26.5% |
| Net AUM additions during the quarter | ₹37,680 crore | — |
| New loans booked | 13.45 million | +11% |
Source: Bajaj Finance’s Q2 FY27 results and management commentary. Figures are rounded where appropriate.
Consolidated net profit increased from approximately ₹4,948 crore in the corresponding quarter of the previous year to ₹6,367 crore. Net interest income rose from ₹10,785 crore to ₹13,335 crore.
Net interest income is the difference between the interest a lender earns on loans and investments and the interest it pays on deposits and borrowings. It is a key measure of performance for lenders because it captures the earnings generated by their core financing activities.
The increase in net interest income, combined with lower adjusted loan losses, supported profit growth during the quarter. However, the sustainability of this performance will depend on whether the company can maintain lending growth without allowing funding costs and credit losses to rise disproportionately.
Customer Acquisition and Loan Disbursements Remain Central
Bajaj Finance expects to book 60–62 million new loans and add 18–20 million customers during FY27.
These targets reflect the company’s strategy of expanding its customer base while increasing lending across multiple products and markets. Its operations cover consumer finance, personal loans, small-business lending, commercial finance, gold loans and other credit products.
Customer acquisition is important because it creates opportunities to cross-sell additional financial products over time. A customer who initially uses a consumer durable loan may later qualify for another product, subject to the lender’s credit assessment and eligibility criteria.
However, adding customers and booking more loans also requires investment in technology, distribution, underwriting and servicing. The financial benefit depends on whether these investments generate sufficient income while keeping delinquencies and operating expenses under control.
The company is therefore pursuing growth alongside efforts to improve efficiency and preserve credit quality. Its ability to meet the revised AUM target will depend on both customer demand and the quality of the loans it originates.
Rising Borrowing Costs Could Pressure Margins
Despite the stronger growth outlook, Bajaj Finance expects some further moderation in net interest margins as borrowing costs rise.
Net interest margin measures the net interest income earned relative to the relevant earning-asset base. It helps investors understand how effectively a lender converts its lending and investment assets into interest income after accounting for funding expenses.
When borrowing costs increase, lenders may need to pay more for deposits and other funding sources. If they cannot raise lending rates by a similar amount, the difference between interest earned and interest paid can narrow.
Management said it had factored in two additional rate increases during the current financial year, which could take rates to around 6%. It expects the incremental pressure on margins to be manageable, although the final effect will depend on the timing and extent of rate changes and how quickly funding costs are passed through.
Bajaj Finance’s cost of funds declined by nine basis points sequentially to 7.87% in the September quarter. Lower funding costs can help cushion the impact of future increases, but the benefit may not continue at the same pace if market rates rise.
The company is also seeking to protect profitability through operating efficiency, fee income and credit-cost management. These measures may help offset some margin pressure, but they do not remove the underlying interest-rate risk.
Operating Efficiency and Credit Quality Matter
Bajaj Finance is continuing to invest in its gold-loan branches, microfinance operations and technology systems. These investments support its expansion strategy, but they also add to operating expenses.
The company’s operating expenses as a proportion of net total income improved to 33% during the September quarter. Management expects a 25–40 basis-point improvement in this ratio during FY27.
A lower operating-expense ratio can help the lender convert a greater share of its income into profit. However, the improvement needs to be considered alongside investment requirements and changes in business volumes.
Credit quality is equally important. Rapid loan growth can increase earnings, but it can also create risks if lending standards weaken or borrowers struggle to repay. The company must balance disbursements with careful underwriting and collections.
Management has said that it expects credit costs to benefit from improving asset quality and the winding down of its captive lending book. However, the actual outcome will depend on economic conditions and repayment behaviour across its customer segments.
Rural markets remain one area of uncertainty. Uneven economic conditions can affect borrowers’ repayment capacity, particularly in segments exposed to agriculture, informal employment and small businesses.
What the Guidance Means for Bajaj Finance’s Long-Term Strategy
The company has retained its medium-term AUM growth target of 23%–25%, even as it raises the FY27 range to 26%–27%. It continues to target long-term annual profit growth of 20%–25% and return on equity of 19%–21%.
This distinction suggests that management views the higher FY27 forecast as an opportunity arising from current business momentum rather than a permanent acceleration in its long-term growth assumptions.
Return on equity measures how effectively a company generates profit from shareholders’ capital. For a lender, sustaining returns depends on growth, margins, credit costs, operating efficiency and capital requirements.
Bajaj Finance must also prepare for potential regulatory changes affecting insurance distribution and revolving-credit products. Management said it was considering different scenarios but would wait for final rules before deciding whether to make changes to its business model.
The company has also announced plans to raise capital through a qualified institutional placement and warrants for promoter Bajaj Finserv, subject to the required approvals. Additional capital could support future lending growth, although an equity issuance can dilute existing shareholders’ ownership.
Investors will therefore need to consider the company’s growth opportunities alongside funding requirements, capital allocation and the effect of any new shares on per-share earnings.
The Bigger Picture
Bajaj Finance’s guidance increase reflects strong lending momentum, rising interest income and higher profitability in the first half of FY27. The revised AUM growth target of 26%–27% suggests that management expects the company to expand faster than it previously anticipated during the current financial year. Its customer-acquisition plans and broad lending portfolio provide several avenues for continued growth.
The challenge is to convert that expansion into sustainable earnings. Higher borrowing costs, regulatory uncertainty, credit quality and operating expenses could influence how much of the additional business translates into profit. The company has retained its medium-term growth and long-term profitability targets, making execution and risk management as important as headline loan-book growth.
Looking Ahead
Investors will watch whether Bajaj Finance can deliver on its revised FY27 AUM growth target while maintaining asset quality and managing funding costs. Quarterly trends in net interest margins, loan disbursements, credit losses and operating expenses will help determine whether the stronger first-half momentum is sustained. Management’s guidance on customer additions and new loan bookings will also provide clues about the pace of expansion.
The longer-term test will be whether the company can maintain its target of 20%–25% annual profit growth and return on equity of 19%–21% without taking excessive credit or capital risk. The revised forecast is a positive signal about current business momentum, but it is not a guarantee of future performance. Actual results will depend on demand, interest rates, competition, regulation and the quality of lending decisions.
Frequently Asked Questions
1. What is Bajaj Finance’s new FY27 AUM growth guidance?
Bajaj Finance now expects AUM to grow by 26%–27% in FY27, compared with its earlier guidance of 23%–25%.
2. How much profit did Bajaj Finance report in Q2 FY27?
The company reported consolidated net profit of approximately ₹6,367 crore for the September quarter, up 29% year-on-year.
3. What was Bajaj Finance’s AUM in Q2 FY27?
Its consolidated AUM reached approximately ₹5.85 lakh crore as of September 30, 2026, an increase of about 26.5% from a year earlier.
4. Why could rising interest rates affect Bajaj Finance?
Higher rates can increase the cost of deposits and borrowings. If lending yields do not rise enough to offset the additional expense, net interest margins may narrow.
5. Has Bajaj Finance changed its long-term growth targets?
No. Management retained its medium-term AUM growth target of 23%–25%, its long-term annual profit growth target of 20%–25% and its return-on-equity target of 19%–21%.
6. Does the higher growth guidance guarantee stronger future profits?
No. Higher AUM can support income growth, but future profitability will also depend on funding costs, credit losses, operating expenses, competition and regulatory developments.
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