Bajaj Finance Q1 FY27 Results Analysis: PAT Jumps 28%, AUM Grows 24% (BAJFINANCE)

Bajaj Finance Ltd's Q1 FY27 numbers came in strong, with revenue of Rs. 23,165.45 Cr (+19.60% YoY) and PAT growth of +27.60% YoY. Here's a quick read of what worked, what to watch, and what management said.

Quarter Snapshot

Bajaj Finance reported strong Q1 FY27 results with 19.6% revenue growth and 27.6% PAT growth, driven by NIM expansion and declining credit costs. Asset quality improved across the board, while AUM grew 24% YoY with notable strength in gold loans and rural segments. However, a slight uptick in cost-to-income ratio and a 5% YoY decline in deposits warrant monitoring.

Key Investment Insights

Key Positives

• Revenue grew 19.6% YoY to Rs.23,165.45 crore.
• PAT grew 27.6% YoY to Rs.6,080.60 crore, with flow-through acceleration from contained credit cost.
• NII grew 22.9% YoY, while finance costs grew only 14.8% YoY, expanding NIM.
• Asset quality improved: GNPA down 7 bps to 0.96%, NNPA down 11 bps to 0.39%.
• Credit cost declined: Loan losses to avg AUF down 33 bps to 1.54%.
• AUM grew 24% YoY to Rs.546,944 crore, with strong growth in gold loans (+112% YoY) and rural segments.
• New loans booked up 20% YoY to 16.13 million.
• PPOP grew 21.7% YoY to Rs.10,136.36 crore.

Risk Factors

• Cost-to-income ratio edged up 31 bps to 33.42%, driven by employee and fee expense growth.
• Deposits declined 5% YoY to Rs.68,534 crore, raising funding mix concerns.
• MSME lending grew only 2% YoY, the slowest organic segment.
• Captive 2W & 3W finance AUM declined 64% YoY as Bajaj Finance pivots away from OEM-linked financing.