Bajaj Finserv margin recovers to 40.78% as revenue growth outpaces costs
Revenue rose +18.62% YoY, but a higher tax rate limited net-profit growth to +18.15%; other income contributed only 0.06% of pre-tax profit.
Filed 31 Jul 2026, 11:56 IST · Bajaj Finserv Ltd (BAJAJFINSV)
Key takeaways
- Consolidated revenue grew +18.62% YoY while expenses rose +17.86%, lifting operating margin by 0.39 percentage points to 40.78%.
- Consolidated net profit rose +18.15% YoY to Rs 6,296.67 cr, but the tax rate increased by 3.49 percentage points to 29.51%.
- At 40.78%, operating margin was 21.16 percentage points below the 61.94% median of 38 reporting financial-services peers.
Price around the results
Revenue growth improves profit conversion
Consolidated revenue rose +18.62% YoY and +9.20% QoQ, while expenses grew more slowly at +17.86% YoY and +3.81% QoQ. That operating leverage lifted operating profit by +19.74% YoY and +18.12% QoQ. Pre-tax profit grew faster at +24.00% YoY and +28.93% QoQ, but the higher tax rate held net-profit growth to +18.15% YoY and +20.48% QoQ.
Operating margin rebounds from the Q3FY26 low
Operating margin expanded by 3.08 percentage points QoQ because revenue growth outpaced expense growth, and was up 0.39 percentage points YoY for the same reason. Interest expense still rose +7.45% QoQ and +15.08% YoY, adding to the pressure below operating profit. The margin has now recovered for two consecutive quarters from 34.92% in Q3FY26 to 40.78%, the highest level in the six-quarter trend.
Margin remains below the reported peer median
Bajaj Finserv's 40.78% operating margin was 21.16 percentage points below the 61.94% median for 38 Financial Services peers that had reported the quarter, placing it 13th from the bottom. Management said Bajaj Finance added 51 lakh new customers during the quarter, while Bajaj Life's retail protection business grew 60% and reached 12% of its product mix. Management also said trail-based revenue structures should add stability and predictability, and that its presence had expanded to more than 4,000 cities.
Other income was not a material profit driver
Other income contributed just 0.06% of pre-tax profit in both the YoY and QoQ comparisons, so the quarter's profit growth was primarily operational rather than dependent on this line. The 29.51% tax rate, up 3.49 percentage points YoY and 4.95 percentage points QoQ, was the main drag on profit conversion. The filing has not yet produced a post-result reaction to assess; across eight prior result reactions, the stock rose twice and fell six times, with a median absolute move of 0.96%.
Q1FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹42,037 cr | ₹38,494 cr | +9.20% | +18.62% |
| Other income | ₹5 cr | ₹25 cr | -79.79% | -60.33% |
| Expenses | ₹24,896 cr | ₹23,983 cr | +3.81% | +17.86% |
| Operating profit | ₹17,141 cr | ₹14,511 cr | +18.12% | +19.74% |
| Operating margin (%) | 40.78% | 37.70% | — | — |
| Interest | ₹7,834 cr | ₹7,291 cr | +7.45% | +15.08% |
| Depreciation | ₹380 cr | ₹317 cr | +19.77% | +19.65% |
| Profit before tax | ₹8,932 cr | ₹6,928 cr | +28.93% | +24.00% |
| Tax | ₹2,636 cr | ₹1,702 cr | +54.86% | +40.60% |
| Net profit | ₹6,297 cr | ₹5,226 cr | +20.48% | +18.15% |
| EPS (₹) | ₹19.60 | ₹15.90 | +23.27% | +12.00% |
Operating margin of 40.78% compares with a Financial Services sector median of 61.94% across 38 peers that have reported Q1FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Bajaj Finance added 51 lakh new customers during the quarter.
- Bajaj Life's retail protection business grew 60% and represented 12% of the product mix.
- Bajaj Finserv Health processed about 6 million healthcare transactions during the quarter.
Guidance & outlook
- Bajaj Finserv aims to deliver sustainable profitable growth, meaningful market share and superior shareholder returns.
- Bajaj Finserv expects trail-revenue structures to provide stability, predictability and non-linearity to future revenue.
Expansion
- Bajaj Finserv has expanded its geographic presence to more than 4,000 cities.
New initiatives
- FINAI implementation is underway in phases across Bajaj Finance businesses and functions.
- Bajaj Finserv Direct completed planned digital customer journey enhancements.
- Bajaj Finserv Health is undertaking a planned business model realignment.
Problems & risks
- Bajaj General's profit after tax declined because of lower capital gains in the external macro environment.
- Bajaj General's combined ratio was affected by Fire segment decline and a higher Government Health loss ratio.
- Bajaj Health reported muted revenue growth because of its planned business model realignment.
What to watch
- Whether consolidated operating margin remains above 40.78% after its two-quarter recovery.
- The next-quarter tax rate against 29.51%, which rose 4.95 percentage points QoQ.
- Bajaj Finance's next-quarter customer additions against the 51 lakh added in Q1FY27.