Bajaj Finance Share Price Falls Over 6%: What Spooked Investors After Q1 Results

Bajaj Finance share price fell up to 6.36 per cent in early trade on July 25 after reporting its quarterly results for the period ended June 30, 2025 (Q1 FY25). Shares of its parent company, Bajaj Finserv, which is set to release its Q1 FY26 results later today, also fell up to 4.89 per cent.

With today’s fall, Bajaj Finance has emerged as the top loser in benchmark Nifty 50 and sub-index Nifty Financial Services.

Bajaj Finance Q1 FY26 Results

Bajaj Finance's consolidated net profit for Q1 FY26 rose 22 per cent year-on-year (YoY) to Rs 4,765 crore. The growth was led by a consistent rise in loan volumes and increase in assets under management (AUM). However, asset quality pressures, especially in certain segments, continued to weigh on overall performance.

The company’s AUM stood at Rs 4.41 lakh crore at the end of June 2025, up 25 per cent from Rs 3.54 lakh crore a year ago. In the same period, Bajaj Finance disbursed 13.49 million new loans, up 23 per cent from Q1 FY25. The non-banking finance company (NBFC) added 4.69 million new customers in the June quarter. With this, its total customer base reached 106.51 million.

Net interest income rose 22 per cent to Rs 10,227 crore, while net total income stood at Rs 12,610 crore, up 21 per cent from the year-ago period. The company’s opex-to-net income ratio improved slightly to 32.7 per cent from 33.3 per cent a year ago.

However, credit costs remained high. Loan losses and provisions rose 26 per cent year-on-year to Rs 2,120 crore due to stress in the MSME and 2-wheeler loan portfolios. Gross non-performing asset (NPA) rose to 1.03 per cent from 0.86 per cent last year, and net NPA increased to 0.50 per cent from 0.38 per cent.

Annualised return on assets (ROA) was 4.5 per cent, while return on equity (ROE) stood at 19 per cent, down from 4.6 per cent and 19.9 per cent in Q1 FY25, respectively.

What Brokerages Say

JM Financial said Bajaj Finance’s Q1 results were better than expected. The brokerage noted that the beat came mainly from lower credit costs, which came in at 2 per cent vs 2.3 per cent in the previous quarter, and strong fee income, which grew 17 per cent both YoY and QoQ.

The brokerage said Bajaj Finance’s AUM growth was led mainly by strong performance in urban consumer and MSME loans. Commercial lending, mortgages, and loan against securities also contributed to the overall growth. Rural lending and urban B2B sales continued to show good momentum. Gold and car loans saw strong growth from a low base. However, the two-wheeler and three-wheeler financing segment saw a sharp decline, as the company continued to scale down that part of the business.

As reported by Reuters, analysts at Goldman Sachs said they do not expect Bajaj Finance's growth to recover in the near term, pointing to continued stress in some of its unsecured loan portfolios and limited scope for net interest margin expansion. UBS analysts also raised concerns, stating that the company’s guidance on near-term credit costs and assets under management for FY26 was "weaker than expected."