Bajaj Housing Finance , a prominent player in India's housing finance sector, has revised its growth projections and unveiled a set of ambitious medium-term financial targets during a recent conference call, signaling its strategic vision for the coming years.

Revised Growth Guidance

Bajaj Housing Finance has adjusted its Assets Under Management (AUM) growth guidance for FY26. The company now projects a growth rate of 21-23%, down from the previously announced 24-26%. This represents a reduction of approximately 3 percentage points from earlier expectations, indicating a more conservative outlook.

Key Financial Targets

The company has outlined several key objectives:

Focus on Asset Quality and Operational Efficiency

Bajaj Housing Finance's GNPA target of 40-60 basis points reflects the company's commitment to maintaining a high-quality loan book. This focus on asset quality is further underscored by the projected credit costs of 20-25 basis points, indicating the company's confidence in its risk assessment and management capabilities.

The company aims to improve its operational efficiency, targeting an operating expenses to net income ratio of 14-15% over the next 3-4 years. This goal suggests a strategic focus on cost management and productivity enhancement.

Capital Structure and Growth Plans

Bajaj Housing Finance has set a target gearing ratio of 7-7.5 times, to be achieved within 2-2.5 years. This target indicates the company's plans for balanced growth, leveraging debt while maintaining a robust capital structure.

Impact on Return on Equity

The company acknowledged that its capital raising plans for FY25 have contributed to a reduced return on equity. This suggests that Bajaj Housing Finance is prioritizing long-term growth and stability over short-term profitability metrics.

Regulatory Compliance and Transparency

As per the LODR (Listing Obligations and Disclosure Requirements) data, Bajaj Housing Finance continues to maintain transparency in its financial reporting. The company has informed the stock exchanges about the conference call and has made the presentation and audio recording available on its website, adhering to regulatory requirements.

Conclusion

Bajaj Housing Finance's revised growth guidance and medium-term targets reflect a strategic balance between growth, asset quality, and operational efficiency. The downward adjustment in AUM growth expectations suggests a more cautious approach in light of current market conditions. The company's continued focus on maintaining low NPAs and credit costs, while improving operational efficiency, indicates a prudent approach to expansion in the competitive housing finance sector. As Bajaj Housing Finance works towards these targets, investors and market observers will likely keep a close eye on its progress and the evolving dynamics of the Indian housing finance market.

Bajaj Housing Finance Limited (BHFL) has reported a robust financial performance for the second quarter of fiscal year 2026, with significant growth in key metrics despite a challenging market environment.

Strong Asset Growth and Profitability

BHFL's Assets Under Management (AUM) grew by 24% year-over-year to ₹1,26,749.00 crore as of September 30, 2025, up from ₹1,02,569.00 crore in the corresponding quarter of the previous year. This growth was accompanied by a 26% increase in loan assets, which reached ₹1,13,059.00 crore.

The company's profitability showed resilience, with Profit After Tax (PAT) rising 18% to ₹643.00 crore in Q2 FY26, compared to ₹546.00 crore in Q2 FY25. Profit Before Tax (PBT) also saw an 18% increase, reaching ₹833.00 crore.

Revenue and Income Growth

Net interest income surged by 34% to ₹956.00 crore, while net total income grew by 22% to ₹1,097.00 crore. This growth was supported by a 17% increase in interest income, which stood at ₹2,614.00 crore for the quarter.

Operational Efficiency and Asset Quality

BHFL demonstrated improved operational efficiency, with the Operating Expenses to Net Total Income ratio decreasing to 19.6% in Q2 FY26 from 20.5% in the same quarter last year. This improvement reflects the company's focus on cost management and digital initiatives.

The company maintained strong asset quality, with Gross Non-Performing Assets (GNPA) at 0.26% and Net Non-Performing Assets (NNPA) at 0.12% as of September 30, 2025. The provision coverage ratio on stage 3 assets stood at a healthy 55.64%.

Capital Adequacy and Liquidity

BHFL's capital position remained robust, with a Capital Adequacy Ratio of 26.12% as of September 30, 2025, well above the regulatory requirement of 15%. The company's strong capital base provides a solid foundation for future growth.

Business Segment Performance

The company's portfolio remained well-diversified:

Home loans continued to be the largest segment, constituting 55.1% of the total AUM.

Management Commentary

Atul Jain, Managing Director of Bajaj Housing Finance Limited, stated, "Our Q2 FY26 results demonstrate the resilience of our business model and our ability to grow sustainably in a competitive market. We have maintained our focus on asset quality while expanding our reach and improving operational efficiencies."

Outlook

While BHFL has shown strong growth, the company has moderated its AUM growth guidance for FY26 to 21-23%, down from the medium-term target of 24-26%. This adjustment reflects the current market dynamics, including heightened competitive intensity in the prime home loans segment and potential moderation in real estate demand.

The company continues to focus on expanding its branch network and increasing its retail book share, aiming to have 250 branches by FY27 and grow its retail book share to above 55%.

With its strong financial performance, robust asset quality, and strategic growth initiatives, Bajaj Housing Finance Limited appears well-positioned to navigate the evolving market landscape and capitalize on opportunities in the housing finance sector.