Bajaj Finance shares slump 6% post Q1 results; what is weighing on sentiment?

The company's asset quality deteriorated, which could be attributed to the sharp fall in the stock.

Bajaj Finance, in its press release on Thursday, said that the gross NPA and net NPA as of June 30, 2025, stood at 1.03% and 0.50%, respectively, as against 0.86% and 0.38% as of June 30, 2024.

The provisioning coverage ratio on stage 3 assets was 52%.

In its investor presentation, Bajaj Finance said in Q1 FY26, the cost of funds was 7.79%, an improvement of 20 bps over Q4 FY25. FY26 cost of funds is expected to be 7.60%-7.65%, it added.

The NBFC added that the deposits book grew by 15% YoY and stood at ₹72,109 crore as of June 30, 2025. Deposits contributed to 19% of consolidated borrowings as of June 30, 2025.

"To optimise the cost of funds, the company is reducing reliance on deposits for the next 12 months," Bajaj Finance said.

What did Bajaj Finance say about credit costs?

Bajaj Finance said consumer leverage continues to remain an area of concern. The company has taken several actions across all products to reduce contribution of customers with multiple loans.

Loan losses and provisions were up 26% to ₹ 2,120 crore in Q1 as against ₹ 1,685 crore in Q1 FY25.

Loan loss to average AUF (Advance Underwriting Facility) was 2.02% in Q1 as against 1.99% in Q1 FY25 and 1.97% (excluding additional provision on ECL model redevelopment) in Q4 FY25.

Credit costs were elevated in 2 & 3-wheeler and MSME businesses. The company has taken significant credit actions in both these businesses, and AUM growth for both these businesses will be low for FY26.

In Q1, the net increase in stage 2 & 3 assets was ₹878 crore, including ₹219 crore of standard accounts that were restructured. Stage 2 assets increased by ₹324 crore, and stage 3 assets increased by ₹554 crore.

Bajaj Finance Q1 FY26 key numbers

Bajaj Finance, the country's largest non-banking finance company (NBFC), on Thursday, July 24, reported a consolidated net profit of ₹4,700 crore in the first quarter of the current financial year (Q1FY26), marking an upside of 20% from ₹3,912 crore in the same period last year.

Its net interest income, the difference between interest earned and interest expended, advanced 22% in Q1 to ₹10,227 crore from ₹8,365 crore in the year-ago period.

Bajaj Finance's fees and commission income came in at ₹1,784 crore, up 17% from ₹1,524 crore in the corresponding period last year.

Loan losses and provisions increased by 26% in Q1FY26 to ₹2,120 crore from ₹1,685 crore in Q1FY25.

The number of new loans booked in the June quarter was 13.49 million as against 10.97 million in Q1FY25, a growth of 23%. Customer franchise stood at 106.51 million compared to 88.11 million in the year-ago period.