Bajaj Finance margin expands as costs lag revenue growth in Q2FY27
Consolidated OPM rose 2.25 percentage points YoY, while management flagged a Rs 337 cr provision and higher Stage 2 and 3 assets.
Filed 19 Oct 2026, 17:20 IST · after market close · Bajaj Finance Ltd (BAJFINANCE)
Key takeaways
- Consolidated operating margin widened 2.25 percentage points YoY to 71.00% as revenue grew +21.64% while expenses rose +12.89%.
- Consolidated net profit grew +28.68% YoY to Rs 6,366.57 cr despite interest expense rising +22.68%.
- Stage 2 and 3 assets increased by Rs 1,601 cr in Q2, including Rs 1,047 cr from gold loans, alongside a Rs 337 cr prudent provision.
Price around the results
Revenue growth translated into faster operating-profit growth
Consolidated revenue grew +21.64% YoY and +5.96% QoQ, while net profit rose +28.68% and +4.70%, respectively. Operating profit grew +25.62% YoY as expenses increased only +12.89%, although interest expense also rose +22.68%. Other income contributed just 0.39% of pre-tax profit, so the earnings increase was not materially supported by non-operating income.
Operating margin reaches a three-quarter recovery high
QoQ revenue growth of +5.96% exceeded expense growth of +4.81%, widening operating margin by 0.32 percentage points. YoY, the same cost discipline lifted margin by 2.25 percentage points. Margin has now increased for three consecutive quarters, from 62.58% in Q3FY26 to 71.00% in Q2FY27. Bajaj Finance's margin was 6.5 percentage points above the 64.5% median of 15 Financial Services peers that had reported.
Provisioning and gold-loan asset quality remain the key watchpoints
Management said Q2 included a Rs 337 cr prudent management and macro-economic provision. The company attributed the Rs 1,047 cr increase in gold-loan Stage 2 and 3 assets to short-tenor schemes that are no longer offered, while saying vintage credit performance across 3MOB, 6MOB and 9MOB improved significantly. Management said it expects a 25-40 basis-point improvement in opex to net total income in FY27 and remains optimistic about the credit-cost outlook. It also said the 5x-5.5x leverage range is being used for resilience and capital planning assessment.
Results filed after close; prior reactions have been mixed
The results were filed after market close, so there is no post-result market move to assess yet. Across the last eight results, the stock rose three times and fell five times, with a median absolute move of 1.83%.
Q2FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹24,546 cr | ₹23,165 cr | +5.96% | +21.64% |
| Other income | ₹33 cr | ₹6 cr | +445.72% | +543.02% |
| Expenses | ₹7,120 cr | ₹6,793 cr | +4.81% | +12.89% |
| Operating profit | ₹17,427 cr | ₹16,373 cr | +6.44% | +25.62% |
| Operating margin (%) | 71.00% | 70.68% | — | — |
| Interest | ₹8,602 cr | ₹7,942 cr | +8.31% | +22.68% |
| Depreciation | ₹321 cr | ₹288 cr | +11.66% | +24.42% |
| Profit before tax | ₹8,537 cr | ₹8,149 cr | +4.76% | +29.19% |
| Tax | ₹2,171 cr | ₹2,068 cr | +4.94% | +30.73% |
| Net profit | ₹6,367 cr | ₹6,081 cr | +4.70% | +28.68% |
| EPS (₹) | ₹10.07 | ₹9.62 | +4.68% | +28.28% |
Operating margin of 71.00% compares with a Financial Services sector median of 64.50% across 15 peers that have reported Q2FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- The company added 2,584 full-time employees in Q2 FY27, with 1,058 net additions after adjusting for gold loans and MFI.
- Vintage credit performance across 3MOB, 6MOB and 9MOB showed significant improvement in Q2 FY27.
Guidance & outlook
- The company expects a 25-40 basis-point improvement in opex to net total income in FY27.
- The company is optimistic about its credit cost outlook for FY27.
- The company is using a 5x-5.5x leverage ratio range for resilience and capital planning assessment.
New products
- Bajaj Financial Securities launched a commodity derivatives product for its customers.
New initiatives
- The company plans to embed AI bots across service communications to increase click-through rates by 1.5 times.
Problems & risks
- Q2 FY27 included a ₹337 crore prudent management and macro-economic provision.
- Stage 2 and 3 assets rose by ₹1,601 crore in Q2, including ₹1,047 crore from the gold loan business.
- The increase in gold loan Stage 2 and 3 assets was attributed to short-tenor schemes that are no longer offered.
What to watch
- Whether consolidated operating margin holds above 71.00%.
- Whether Stage 2 and 3 assets, after the Rs 1,601 cr Q2 increase, stabilise in the next quarter.
- Whether opex to net total income improves by the 25-40 basis points indicated by management for FY27.