Bajaj Housing Finance Q1 FY26 Review – Strong Growth Amid Margin Stability

Bajaj Housing Finance Q1 FY26 – 21 percent PAT rise, 24 percent AUM jump, steady margins. Deep dive into fundamentals, technicals, and outlook.

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Bajaj Housing Finance – Q1 FY26 Performance Breakdown

Bajaj Housing Finance delivered a resilient Q1 FY26 performance showcasing sustained growth, disciplined financials, and confident yet cautious optimism.

Key Financial Highlights

• Profit After Tax PAT – 583 crore up 21 percent year-on-year

• Total Revenue from Operations – 2616 crore up 18 percent year-on-year

• Assets Under Management AUM – 1.204 lakh crore up 24 percent year-on-year

• Net Interest Income NII – 887 crore up 33 percent year-on-year

• Net Total Income – 1012 crore up 25 percent year-on-year

• Pre-provisioning Profit – 798 crore up 25 percent year-on-year

• Expenses – 1862 crore up 18 percent year-on-year

• Net Interest Margin NIM – Steady around 4 percent

• Gross and Net NPAs – 0.30 percent and 0.13 percent, respectively

• Capital Adequacy – Strong at 26.9 percent

These numbers reflect strong underlying growth coupled with margin stability and tight asset quality – rare in a highly competitive rate-sensitive housing finance space.

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Fundamentals – Strength and Caution

Growth Drivers

1. AUM Expansion – 24 percent year-on-year growth shows strength in home loans, LA,P, and lease rental financing

2. NII Surge – A significant 33 percent jump in interest income from lending activities

3. Scaling Efficiency – Operating expenses remained proportional to growth, maintaining cost-to-income at 21 percent

4. Credit Discipline – NPAs remain stable, and provisioning coverage stands at 56 percent

Headwinds to Monitor

• Margins – NIM held steady but could face mild compression due to competitive pricing and rising borrowing costs

• Expense Traction – Investment in expanding geographies may increase costs

• Economic Sensitivities – The housing finance segment is cyclical and affected by real estate slowdowns

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Technical Analysis – Gauging Market Sentiment

According to TradingView via NSE

• Share Price – Around 129

• EPS Q1 – 2.65

• Market Cap – Approximately 1.08 lakh crore

• Valuation – Fair value estimate near 140

• Support and Resistance

  • Support zone – 115 to 120

  • Resistance – 140 to 145

• Return Metrics FY24

  • ROA – Around 2.3 percent annualised Q1

  • ROE – 11 to 12 percent, slightly lower thanthe  previous year

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Summary Table

Parameter	Q1 FY26 Performance
PAT Growth	21 percent year-on-year
Revenue Growth	18 percent Total Income 25 percent
AUM Growth	24 percent year-on-year
NII Growth	33 percent
NIM Stability	Around 4 percent
Asset Quality	NPA at 0.30 percent and 0.13 percent
Expense Ratio	21 percent of Net Total Income

Outlook – What Lies Ahead

Short Term

• Expect moderation in margin expansion

• Near-term share price consolidation likely around 125 to 135 range

• Q2 will be critical for rate trend clarity

Medium Term

• AUM target of 21 to 23 percent is ambitious – beating it will uplift sentiment

• Expansion into new markets supports future scalability

• Credit discipline will define investor faith

Long Term

• Strong capital base and AAA rating

• A safe play for long-term housing finance exposure

• Potential for upward re-rating if macro sentiment strengthens

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Author’s Note

Bajaj Housing Finance’s Q1 FY26 performance demonstrates disciplined growth at scale. A healthy 24 percent AUM expansion 33 percent surge in net interest income, and margin stability amid competitive pressures indicate strong execution. While rising expenses and margin compression are mild risks, the company remains well-positioned in a cyclical yet essential segment. Valuation seems reasonable, and a breakout beyond 140 will be a key signal. For investors focused on balance sheet strength, sector leadership, and macro resilience, BHFL offers a compelling mix – but watching industry rate dynamics will be crucial.

Source: As per Economic Times and Business Today