Bajaj Finance Q2 Profit Rises 29% to Rs 6,367 Crore as Board Clears Rs 17,500 Crore Capital Raise

Bajaj Finance reported a 28.7% year-on-year rise in consolidated net profit to Rs 6,367 crore for the July-September quarter, up from Rs 4,948 crore a year earlier. The results, released after the market closed on Monday, came alongside a board decision to raise up to Rs 17,500 crore in fresh capital.

The stock had ended the day 2.52% lower at Rs 957.35 on the NSE before the numbers came out, part of a broad sell-off that dragged the Sensex down about 876 points. Tuesday's session will be the first chance for investors to react to both the earnings and the dilution plan.

Growth held up across the loan book

Net interest income, the gap between what the lender earns on loans and pays on borrowings, rose 24% to Rs 13,335 crore from Rs 10,785 crore. Assets under management climbed 26% to about Rs 5.85 lakh crore, with Rs 37,680 crore added in the quarter alone.

The number of new loans booked grew a more modest 11% to 13.45 million. The company's investor presentation kept its full-year target of 60-62 million new loans for FY27. It added 4.42 million customers during the quarter, taking its franchise to 128.85 million, and expects to add 18-20 million over the full year.

On a standalone basis, profit rose 30.2% to Rs 5,536 crore and revenue from operations grew 22.9% to Rs 20,891 crore. Sequentially, standalone profit was up 3.6% from the June quarter.

The quiet number: credit costs

The most telling line in the filing may be impairment. Standalone loan-loss provisions rose to Rs 2,131 crore from Rs 2,037 crore a year ago, an increase of under 5%, at a time when the book grew more than a quarter. That gap is a big reason why profit grew faster than income.

Asset quality backs this up. Gross non-performing assets fell to 1.06% from 1.24% a year earlier, and net NPAs eased to 0.42% from 0.60%. For a lender with a large share of unsecured consumer and small-business loans, that is a meaningful improvement.

Funding costs, by contrast, moved in step with growth. Finance costs rose about 22% to Rs 6,399 crore. Deposits stood at Rs 69,754 crore, about 14% of consolidated borrowings, giving the company a cheaper and steadier funding base than pure market borrowing.

Why the capital raise matters

The board approved a qualified institutions placement of up to Rs 11,700 crore and preferential warrants of up to Rs 5,800 crore to the promoter side, subject to approvals. Bajaj Finserv, the parent, has separately said it plans to invest up to Rs 5,800 crore in the subsidiary.

At Monday's market value of about Rs 5.96 lakh crore, the full Rs 17,500 crore would add roughly 3% to the share count. Lenders growing assets at 25% or more need regular capital top-ups to keep their capital adequacy ratios comfortable. Promoter money arriving alongside the QIP tells institutional investors the parent still backs that growth.

The trade-off is simple. Existing shareholders take a small dilution in return for a bigger balance sheet. That makes sense only if the company can keep credit costs this low while it grows, and the September quarter supports the case.

What to watch next

The stock has fallen about 8% over the past month and trades well below its 52-week high of Rs 1,176.40, hit on August 3. Investors will look at the pricing of the QIP, whether loan growth stays near 25% in the festive quarter, and whether provisioning keeps trailing book growth as it did this quarter.

This is an original summary based on public reporting. See our editorial policy for how we source, write, and correct our stories.