BAJAJHFL - Bajaj Housing

📊 NSE: BAJAJHFL 🏢 Finance - Housing 📅 Last Updated: 12/13/2025 18:56

💰 Financial Performance

Revenue Growth by Segment

Assets Under Management (AUM) grew 26% YoY to INR 1,14,684 Cr in FY2025. Segment-wise AUM growth in Q2 FY2026 was: Home Loans (HL) 19%, Loan Against Property (LAP) 29%, Lease Rental Discounting (LRD) 35%, and Developer Financing (DF) 25%.

Geographic Revenue Split

The company operates across 176 locations with a network of 220 branches. Expansion is focused on deepening presence in existing markets and emerging ones, with NCR and Northern India locations becoming operational in FY2025.

Profitability Margins

Net Interest Income (NII) grew 20% to INR 3,007 Cr in FY2025. Profit After Tax (PAT) rose 25% to INR 2,163 Cr in FY2025 and grew 19% in H1 FY2026. Annualized Return on Assets (ROA) stood at 2.3% and Return on Equity (ROE) at 12.2% as of Q2 FY2026.

EBITDA Margin

Pre-impairment operating profit grew 28% to INR 2,850 Cr in FY2025. Operating efficiency improved as Opex to Net Total Income (NTI) ratio decreased from 24.0% in FY2024 to 20.8% in FY2025, and further to 19.6% in Q2 FY2026.

Capital Expenditure

Not disclosed in available documents; however, the company maintains a healthy Capital Adequacy Ratio (CAR) of 26.12% as of Q2 FY2026 to support growth.

Credit Rating & Borrowing

The company maintains the highest possible credit rating (CRISIL AAA). Cost of Funds (CoF) dropped by 50 bps YoY to 7.4% in Q2 FY2026, while portfolio yield moderated to 9.3%.

⚙️ Operational Drivers

Raw Materials

Debt capital is the primary 'raw material', consisting of NCDs, Term Loans (INR 7,000 Cr), NHB Refinance (INR 2,894 Cr), and Commercial Paper (INR 3,550 Cr).

Import Sources

Sourced from domestic capital markets, commercial banks, and the National Housing Bank (NHB).

Key Suppliers

Key providers of capital include the National Housing Bank (NHB) and various commercial banks for term loans and credit lines.

Capacity Expansion

Current network includes 220 branches across 176 locations. The company is rapidly scaling its developer financing and prime home loan teams to increase market penetration.

Raw Material Costs

Cost of Funds (CoF) was 7.4% in Q2 FY2026, a 34 bps sequential drop. Procurement strategy involves a balanced mix of floating and fixed-rate liabilities to optimize costs.

Manufacturing Efficiency

Opex to NTI ratio improved to 20.8% in FY2025 from 24.0% in FY2024, reflecting enhanced operational efficiency through digitalization.

Logistics & Distribution

Distribution is handled through 220 branches and an Approved Project Finance (APF) network of over 8,300 projects.

📈 Strategic Growth

Expected Growth Rate

21-23%

Growth Strategy

Strategy involves increasing market share in incremental home loan originations to 5% (from ~2.7%), optimizing product mix with 2-3% movements between HL, LRD, DF, and LAP, and reducing Opex to NTI to 14-15% through end-to-end digitalization.

Products & Services

Home Loans (HL), Lease Rental Discounting (LRD), Developer Financing (DF), and Loan Against Property (LAP).

Brand Portfolio

Bajaj Housing Finance, Bajaj Group.

New Products/Services

Expansion into Non-Prime Home Loans and deepening Developer Financing to enhance overall portfolio returns.

Market Expansion

Deepening presence in 176 existing locations and expanding into Northern India and NCR hubs.

Market Share & Ranking

Current incremental home loan market share is approximately 2.5-2.7%, with a target to reach 5%.

Strategic Alliances

Maintains assignment transactions with multiple partners, with an outstanding assigned portfolio of INR 15,171 Cr as of March 2025.

🌍 External Factors

Industry Trends

The home loan industry grew at a 13.7% CAGR (FY20-25) and is expected to grow at 14-16% CAGR through FY2028, reaching a size of INR 60-63 Lakh Cr.

Competitive Landscape

The prime segment is highly competitive and dominated by banks; BHFL competes by leveraging its parent group's brand and active treasury management.

Competitive Moat

Moat is built on the 'Bajaj' brand trust, the lowest cost of funds in the HFC sector, and a massive APF network of 8,300+ projects which provides unique customer access.

Macro Economic Sensitivity

Highly sensitive to interest rate cycles; a 15-20 bps margin decline is anticipated due to market competition and interest rate movements.

Consumer Behavior

Shift toward prime retail and commercial segments (LRD/DF) where customers seek competitive interest rates and fast processing.

Geopolitical Risks

Minimal impact as operations are entirely domestic within the Indian housing market.

⚖️ Regulatory & Governance

Industry Regulations

Subject to RBI and NHB regulations. The company must comply with Minimum Public Shareholding (MPS) norms, requiring the promoter (Bajaj Finance Ltd) to divest up to 2% (166.6 million shares) by February 2026.