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Bajaj Housing Finance Ltd. (BAJAJHFL) Q3 FY26 Results Analysis

Lesson 223/323 | Study Time: 20 Min

Course: Quarterly Result Updates & Analysis

Bajaj Housing Finance Ltd. (BAJAJHFL) Q3 FY26 Results Analysis

Bajaj Housing Finance continues its steady growth trajectory, reporting a 21% YoY increase in Profit After Tax (PAT) for Q3 FY26. The company maintains a high-quality, diversified loan book with a strong focus on prime segments while aggressively scaling its "Sambhav" near-prime and affordable housing unit.

1. Financial Growth Table (Q3 FY26)

Metrics	Q3 FY26 (Current)	Q3 FY25 (YoY)	Q2 FY26 (QoQ)	Growth (YoY %)	Growth (QoQ %)
AUM (₹ Cr)	1,33,412	1,08,314	1,26,749	23.2%	5.3%
Disbursements (₹ Cr)	16,545	12,571	15,914	31.6%	4.0%
Revenue (Net Total Income)	1,153	933	1,112*	23.6%	3.7%
Operating Profit (PPOP)	934	748	889*	24.9%	5.1%
Profit After Tax (PAT)	665	548	643	21.4%	3.4%
EPS (Basic ₹)	0.80	0.66	0.77	21.2%	3.9%

*Calculated based on 9M and H1 reported data.

Segmental AUM Growth & Share

Segment	Q3 FY26 AUM (₹ Cr)	Share %	YoY Growth %
Home Loans	72,710	54.5%	18%
LRD	29,351	22.0%	39%
Developer Finance	15,476	11.6%	18%
LAP	14,275	10.7%	32%
Others	1,600	1.2%	-

2. Sector-Specific KPIs (NBFC/Housing Finance)

Net Interest Margin (NIM): Remained stable at 4.0% YoY and QoQ.
Net Interest Income (NII): Increased 19% YoY to ₹963 Cr.
Asset Quality: GNPA stood at 0.27% and NNPA at 0.11%. Provision Coverage Ratio (PCR) is healthy at 58.76%.
Cost of Funds (CoF): Moderated by 5 bps sequentially to 7.3% , and 60 bps lower than Q3 FY25 (7.9%).

3. Profitability & Valuation Suite

Profitability

Return on Equity (ROE): 12.3% (Annualized).
Return on Assets (ROA): 2.3% (Annualized).
Opex to NTI: Improved to 19.0% from 19.8% YoY.

Valuation & Capital

Price to Book (P/B): Calculated at ~3.3x based on CMP 87 and Net Worth of ₹21,838 Cr (Equity shares: ~832.8 Cr ).
Debt-to-Equity: 4.5 times.
Capital Adequacy (CRAR): 23.15%.

4. Analyst View & Management Insights

Beat/Miss vs. Estimates: The company delivered strong AUM growth of 23%, meeting upper-end internal targets. Asset quality remains superior with GNPA at a minimal 0.27%.

Critical Concall Insights:

Tier-1 Capital Decline: Management explained a ~3% QoQ drop in Tier-1 capital due to conservative provisioning for entire undisbursed tranches of under-construction loans following new RBI consolidation guidelines.
Competitive Intensity: High pressure remains from Public Sector Banks (PSBs) on pricing for "Prime" and "Super Prime" segments.
Sambhav SBU Expansion: Monthly disbursement run-rate for the near-prime/affordable segment is at ₹325–350 Cr, with a target to double this to ₹600 Cr+ in 12–15 months.

Future Growth Outlook (FY26-27):

AUM Growth: Guided at 21–23% for FY26.
Marginal NIM Pressure: NIMs may moderate by 15–20 bps in FY26 due to lower investment income following capital raises in FY25.
Operating Leverage: Management expects Opex to NTI to reach 14–15% over the medium term (3–4 years) as digital and AI interventions scale.

Trend Analysis:

Comparing H1 FY26 (Revenue growth 16%, Net Profit Margin 22.6%) to Q3 FY26:

Revenue Growth: Accelerated to 23.6% in Q3, showing an improving trend.
Net Profit Margin: Stood at 23.04% for Q3, showing a slight improvement over the H1 average.

Conclusion: Wealth-Building Strategy

Bajaj Housing Finance remains a "Low Risk, Scalable" business model focused on anchor products like Prime Housing and LRD. With superior asset quality and a clear path toward operating efficiency, it fits well into a long-term wealth-building strategy (Step 4: Valuation).

Detailed Fair Value analysis and entry strategies are available at https://docs.google.com/spreadsheets/d/e/2PACX-1vQ0XEkW3UXcRdgIUeuY_R4LO0HkkNODym3xSQjnZQaQBDi7RKpFAdcW2SPZURFmfT3mmX3DxZBEr7FS/pubhtml?gid=190497733&single=true

Disclosure: We are Corporate Investment Advisors. The above analysis is based on publicly available financial data and is intended for educational purposes only. It does not constitute a direct buy or sell recommendation.

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