BAJAJHFL - Bajaj Housing Finance Limited Share Price

Bajaj Housing Finance Limited management has provided a positive outlook for the company, highlighting a strong performance in the quarter ended March 31, 2026. They reported a 23% growth in Assets Under Management (AUM), reaching INR 140,000 crores, with Profit Before Tax (PBT) growth of 20% and Profit After Tax (PAT) increased by 14%. Excluding a one-time tax benefit of approximately INR 34 crores from the previous year, normalized PAT growth was also 20%.

Key forward-looking points include:

• AUM addition in Q4 FY26 was INR 7,294 crores, up from INR 6,370 crores in Q4 FY25.
• Disbursements increased by 23% year over year, achieving INR 17,506 crores.
• Home loans AUM grew by 18%, while Loans Against Property (LAP) grew by 24% and Lease Rental Discounting (LRD) by 44%.
• Net interest margin decreased by 12 bps sequentially to 3.8%, attributed to a 14 bps reduction in portfolio yield, with a focus on maintaining and managing costs.
• The company maintains a strong capital adequacy ratio of 22.46%, above regulatory requirements, indicating a solid financial foundation.

Management also noted that the company is on track to achieve a projected monthly disbursement of over INR 600 crores in the Sambhav housing segment over the next year, with current monthly disbursements in this category averaging between INR 410 crores to INR 425 crores.

In terms of credit cost, annualized credit costs for the quarter were 19 bps, reflecting a prudent approach to provisioning, and asset quality remained stable with Gross Non-Performing Assets (GNPA) at 27 bps. Looking forward, the management anticipates slightly downward pressure on margins but emphasizes operational efficiency and credit quality to offset challenges and maintain robust growth.

1. Question: "What is the home loans as a percentage of AUM?" Answer: Home loans made up 50.45% of our Total Assets Under Management (AUM). This is based on the regulatory definition that mandates at least 50% of total assets in home loans, which also includes investments and cash buffers.

2. Question: "What are the levels of prepayments and what's the BT-out from the customers?" Answer: Prepayments in Q4 matched Q3's trend. Attrition was around 20%, with roughly 10% attributed to BT-out. This BT-out primarily goes to public sector banks and a mix of private banks like HDFC and ICICI.

3. Question: "Which product segments drove margin decline?" Answer: The margin decline of 12 bps was mainly driven by lower acquisition prices, particularly in home loans due to competitive intensity. A shift in the product mix toward lower-margin segments also contributed.

4. Question: "Do you expect any changes in yields?" Answer: For Q1, yields might compress slightly, but we expect stable cost of funds due to existing borrowings. We anticipate a marginal decline overall but with some offset from operational efficiencies.

5. Question: "Can you provide segment-wise yields for FY26?" Answer: Home loans yielded around 8.5-8.6%, while LAP was about 9.9-10.1%, developer finance yielded 11.5-11.75%, and lease rental discounting was in the 7.9-8% range.

6. Question: "What are the trends in fee and assignment income?" Answer: We aim to significantly grow both fee and assignment income, in line with loan growth. This year, fee income rose to INR297 crores, up from INR200 crores, driven mainly by insurance income and foreclosures.

7. Question: "What's the outlook on BT-out rates?" Answer: We project BT-out rates to decline as policy rates stabilize. However, we've observed persistently high competition, especially from public sector banks, affecting BT-out rates in Q4.

8. Question: "How does the current economic environment affect loan pricing?" Answer: Economic conditions, including market volatility, influence our pricing strategies. If there are no significant policy rate hikes, we may not see reductions in PLR rates given elevated borrowing costs.

9. Question: "How are you managing your Stage 2 coverage?" Answer: We proactively increased Stage 2 coverage as a prudent measure, believing it provides a safeguard despite no visible micro-level stress in our portfolio. All bounce metrics indicate improvement.

10. Question: "What's the size of the Sambhav book?" Answer: The Sambhav housing finance AUM now stands at approximately INR9,000 crores. The portfolio mix is close to 70% affordable loans and 30% in the near-prime segment.