Bajaj Finance adjusts growth outlook, reduces MSME loan volumes

Bajaj Finance has revised its full-year AUM growth guidance for FY'26 to 22-23%, down from an earlier 24-25%. This adjustment stems from significant risk actions in the MSME business, including a 25% volume reduction in unsecured MSME loans, and a revised assessment from Bajaj Housing Finance Limited. The MSME business is now expected to grow by only 10-12% this fiscal year. Despite these moderations, other business lines, such as gold loans and new car financing, are growing healthily, with overall assets under management increasing by 24% to INR 462,261 crores in Q2 FY2026.

Credit costs remain elevated at 2.05% in Q2, compared to 2.02% in Q1. The company anticipates full-year credit costs to be at the upper end of its guided range of 1.85% to 1.95%. Captive two- and three-wheeler finance, which contributes 1.5% to AUM but 9% to loan losses, continues to be phased out, signaling expected improvements in loan loss metrics from FY'27. Operating efficiencies improved, with Opex to NTI reducing to 32.6% from 33.2% year-on-year.

Bajaj Finance highlighted its ongoing FinAI transformation, with 442 AI voice bots now live and contributing INR 2,000 crores in origination in Q2. The company added 4.13m new customers in Q2 alone, expanding its customer franchise to 110.64m, with an expectation to add 16-17m new customers in FY'26. The festive season saw record disbursements of 6.3m loans, a 27% increase in volume and 29% in value over the last year.