Bajaj Finance Revises FY26 AUM Growth Forecast to 21-22% Amid Business Strategy Changes

Bajaj Finance has revised its Assets Under Management (AUM) growth forecast for FY26, setting expectations between 21% and 22%. The adjustment comes as the financial services company navigates changes in its business portfolio and market conditions.

Key Business Developments

The company's updated growth projection reflects two significant operational changes that are expected to impact overall performance:

Factor:	Impact
MSME Business Performance:	Experiencing slower growth
Two-Wheeler Financing:	Operations being discontinued
Revised FY26 AUM Growth:	21% to 22%

Strategic Business Changes

The slower growth in the MSME (Micro, Small and Medium Enterprises) business segment represents a key factor in the revised forecast. Additionally, Bajaj Finance's decision to end its two-wheeler financing operations marks a strategic shift in the company's product portfolio.

Future Guidance Timeline

Bajaj Finance has announced that it will share its FY27 AUM growth guidance alongside the release of its Q4 results. This approach suggests the company is taking a measured stance on longer-term projections while assessing the full impact of its current business adjustments.

The revised FY26 forecast indicates the company's commitment to providing realistic growth expectations while managing the transition away from certain business segments.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
+1.17%	-6.33%	-16.97%	-16.29%	-4.94%	+56.83%

Bajaj Finance reported mixed Q3 results with consolidated net profit declining 6.1% year-on-year to ₹39.8 billion from ₹42.4 billion, falling significantly short of analyst estimates of ₹53 billion. Despite profit pressures, the financial services company demonstrated strong revenue momentum and notable improvements in asset quality metrics.

Financial Performance Overview

The company's Q3 financial results revealed contrasting trends across key performance indicators. While profitability faced headwinds, revenue growth remained robust with total revenue reaching ₹186.6 billion, marking an impressive 18.3% year-on-year increase from ₹157.7 billion.

Financial Metric:	Q3 Current	Previous Period	Change
Consolidated Net Profit:	₹39.8 billion	₹42.4 billion (YoY)	-6.1%
Total Revenue:	₹186.6 billion	₹157.7 billion (YoY)	+18.3%
Analyst Estimate:	₹53.0 billion	-	-25.1% variance

Asset Quality Shows Marked Improvement

Despite profit challenges, Bajaj Finance demonstrated significant progress in asset quality management. Both gross and net NPA ratios improved on a quarter-on-quarter basis, reflecting enhanced collection efficiency and better loan recovery mechanisms.

Asset Quality Metric:	Q3 Current	Previous Quarter	Improvement
Gross NPA Ratio:	1.21%	1.24% (QoQ)	-3 basis points
Net NPA Ratio:	0.47%	0.60% (QoQ)	-13 basis points

Performance Analysis

The quarter highlighted the company's ability to maintain strong business momentum despite challenging market conditions. Revenue growth of 18.3% demonstrates robust demand for the company's financial services offerings and effective market expansion strategies. However, the substantial gap between actual profit of ₹39.8 billion and analyst expectations of ₹53 billion indicates margin pressures and operational challenges.

The improvement in asset quality metrics provides a positive outlook for future performance. The gross NPA ratio declining to 1.21% from 1.24% quarter-on-quarter, combined with net NPA improvement to 0.47% from 0.60%, suggests effective risk management and collection processes.

Market Impact and Outlook

The mixed results reflect the broader challenges facing the financial services sector, with companies balancing growth ambitions against asset quality concerns. While the profit decline and significant variance from estimates may concern investors, the strong revenue growth and improving asset quality metrics provide encouraging signals for the company's operational resilience and long-term prospects.