Bajaj Finance (BAF IN) – Q1FY27 Result Update – Strong growth with improving asset quality trends – ACCUMULATE
Published on 31 Jul 2026
AUM grew 24% YoY to INR5,469.4bn driven by strong momentum across mortgages and urban/ rural consumer finance on the back of deeper customer penetration and wider distribution reach. Management expects MSME growth to recover from Q3FY27 following portfolio pruning and we build AUM growth of 24%/23% for FY27/FY28E supported by FINAI-led sourcing capabilities. NIM remained resilient at ~9.6% and we expect it to be range-bound in FY27E with CoF under control. Asset quality improved sequentially with healthy vintage performance supporting a positive credit cost outlook; we factor in credit cost of ~1.6% for FY27E. Opex is likely to moderate by ~30bps in FY27E benefited from improved operating efficiencies. We slightly tweak our estimates to account for positive growth momentum, stable margin and improved opex and credit cost outlook in FY27E. Maintain “Accumulate” with a multiple of 4.2x (vs. 4.1x earlier) and a TP of INR1,125.
