Bajaj Housing Finance (BHFL) on Wednesday reported a 21% year-on-year increase in its net profit to Rs 583 crore for the June quarter.
Assets under management (AUM) grew 24% to Rs 1.20 lakh crore. However, the AUM growth was affected owing to an intense competition and a marginal decline in real estate demand. The net interest margin (NIM) remained stable at 4%.
The asset quality continued to be strong with gross NPA ratio of 0.30% and net NPA ratio of 0.13%. The annualised credit cost stood at 0.16%.
Guidance for FY26
The company has revised its guidance for FY26. Managing director Atul Jain said at the earnings call the revision was due to heightened competition and pressure from rate cuts, which are expected to continue for another one or two quarters. Jain anticipates a recovery by the end of the third or fourth quarter, provided there is no further disruption.
The AUM growth forecast has been adjusted from 24-26% to 21-23% for FY26. The company said the assessment for the year has been moderated because of competitive pricing in acquiring new loans, increased portfolio attrition and the moderation in real estate demand.
The company expects to maintain a healthy risk metrics across its product portfolios. Gross NPAs, credit cost, and the provisional coverage ratio are anticipated to remain within the medium-term guidance.
Expected Numbers
Net interest income (NII) for FY26 is expected to be stable and in line with FY25 figures. The NIM is projected to dip by 15-20 basis points due to a decrease in investment income, which was unusually high in FY25 owing to two rounds of capital raises and lower income from derecognised loans as a result of reduced assignments planned for FY26.
Additionally, the return on equity expectation has been revised from a range of 13-15% to 11-12% for this fiscal, reflecting a moderation due to the equity overhang from capital raises completed in FY25, the company said.
