Bajaj Housing Finance Q2 Profit Hits Rs 757 Crore

Bajaj Housing Finance reported a Profit After Tax (PAT) of Rs 757 crore for Q2 FY27, marking an 18% increase compared to the previous year. Assets Under Management (AUM) grew 25% to Rs 1.58 lakh crore, supported by quarterly disbursements of Rs 19,900 crore.

Reader Takeaway: Strong AUM growth of 25% is balanced against guided NIM compression of 20-25 bps for the year.

What just happened

Bajaj Housing Finance delivered a steady performance in the second quarter. The company's Profit Before Tax (PBT) reached Rs 980 crore, also up 18% YoY. Operating efficiency improved, with the opex-to-NTI ratio declining to 19.1% from 19.7% in the same quarter last year. Notably, the company saw a 17 basis point reduction in the cost of funds due to the restructuring of its debt instruments.

Why this matters

The company’s ability to scale its AUM at a 25% clip highlights its aggressive expansion in the mortgage market. The 'Sambhav Housing' segment reached a significant milestone, achieving a Rs 500 crore monthly disbursement run rate. However, the anticipated NIM compression of 20-25 basis points for FY27 reflects the tightening interest rate environment and intense competition in the prime mortgage sector.

Asset Quality and Operational Health

Asset quality remains robust, with Gross NPA flat at 29 basis points and Net NPA at 12 basis points. The borrowing mix remains well-diversified with a 56% reliance on money market components. To manage margins, the company implemented a 15 basis point hike in its Prime Lending Rate effective October 16, 2026.

Risks to watch

Management has highlighted caution regarding interest rate transmission. There is a risk of higher portfolio attrition if competitors do not fully pass on repo rate hikes, which could hinder AUM growth. The company maintains its annual growth guidance of 21%-23%, though it remains watchful of volatility in the interest rate cycle.

What to track next

Investors should monitor the impact of the PLR hike on the company's competitive positioning and whether the 'Sambhav Housing' segment sustains its target of contributing 20% to total home loan originations by year-end.