Whalesbook
Operational Momentum Outweighs One-Time Profit Hit
Bajaj Finance's third quarter for fiscal year 2026 presented a narrative of resilience amidst accounting adjustments. While net profit saw a year-on-year decline of 6.3% to ₹3,978 crore, this figure was significantly influenced by an exceptional charge of ₹265 crore. This charge stemmed from increased gratuity liabilities, a consequence of past service costs tied to the implementation of the New Labour Codes on November 21, 2025 [cite: provided News1, 9].
On the operational front, the company demonstrated robust performance. Net Interest Income (NII) expanded by a healthy 21% year-on-year to ₹11,318 crore, driven by substantial growth in its loan book and sustained demand across key lending segments. Assets Under Management (AUM) mirrored this strength, climbing 22% in the quarter to ₹4.86 lakh crore as of December 31, 2025. This continued expansion underscores Bajaj Finance's deep market penetration and scale within the non-banking financial company (NBFC) sector. The company's market capitalization stood at approximately ₹5.62 trillion on February 3, 2026, reflecting its status as a large-cap entity.
Customer Acquisition Fuels Lending Growth
The expansion in the lending book was buoyed by consistent customer acquisition and increased loan disbursements. Bajaj Finance reported a 15% year-on-year rise in new loan bookings, originating 13.90 million new loans during the quarter. This growth was complemented by the addition of 4.76 million new customers, reinforcing its dominant position in retail-focused lending and its effective digital distribution channels [cite: provided News1, 11].
Asset Quality and Prudent Provisioning
Bajaj Finance maintained a generally healthy asset quality profile, with gross non-performing assets (GNPA) at 1.21% and net NPAs at 0.47% as of December 31, 2025. These figures show slight shifts compared to the previous year, with GNPA up from 1.12% and net NPA down from 0.48%. Nevertheless, loan losses and provisions for the quarter were elevated at ₹3,625 crore, which included an accelerated Expected Credit Loss (ECL) provision of ₹1,406 crore. This reflects a strategic, cautious stance by management in response to evolving borrower risk dynamics and the natural seasoning of its expanding portfolio. This approach to provisioning contrasts with some peers; for instance, HDFC Bank reported a sharp 18% quarter-on-quarter decline in provisions, while ICICI Bank saw its provisions jump significantly, impacting its net profit.
Market Reaction and Analyst Outlook
The market reaction on February 3, 2026, indicated a focus on the underlying operational strength. Despite the reported dip in net profit, Bajaj Finance shares experienced a significant rally, touching an intraday high of ₹974.55 and closing with a 5.87% gain. This suggests investors prioritized the robust NII and AUM growth over the one-time exceptional charge. The Price-to-Earnings (P/E) ratio for Bajaj Finance hovered around 30.7-30.8 as of early February 2026, placing it within a typical range for established growth-oriented NBFCs.
However, the analyst sentiment appears tempered. Credit Suisse maintained a 'neutral' rating following the results. Furthermore, Bajaj Finance's Mojo Score stood at 61.0 with a 'Hold' grade, following a downgrade from 'Buy' on February 1, 2026, indicating some caution from market observers regarding its near-term outlook. The impact of new labor codes was also flagged by HDFC Bank, which noted an incremental cost of approximately ₹800 crore, a factor relevant to operational expenses across the sector. The company maintained a strong liquidity buffer of ₹15,081 crore and a well-diversified funding base, with its deposit book reaching ₹71,037 crore [cite: provided News1].