The company’s calculated NIM contracted about 9 basis points sequentially in the second quarter, while management indicated that FY27 organic NIM contraction could be marginally higher than its earlier guidance of 10-15 basis points because of an expected increase in funding costs in the third and fourth quarters.

Bajaj Finance’s AUM grew 26.5% YoY to Rs5.85 lakh crore, prompting it to raise FY27 growth guidance to 26-27%, with broad based growth across major segments. Credit costs remained stable at 1.56%, while excluding a Rs340 crore macroeconomic overlay, credit costs declined 12% YoY to Rs1,830 crore, or 1.32%. Asset quality saw a minor deterioration, with GNPA rising to 1.06%, driven partly by a temporary increase in Stage 2 gold loans, 55% of which has already been resolved. The proposed Rs17,500 crore capital raise is expected to support NIM as funding costs rise, while Motilal Oswal expects PAT to compound about 30% annually through FY28.

Bajaj Finance is likely to face greater pressure on its organic net interest margin in the second half of FY27 as funding costs are expected to rise, even as strong loan growth, improving asset quality and a proposed Rs17,500 crore capital raise support earnings. The company’s calculated NIM contracted about 9 basis points sequentially in the second quarter, while management indicated that FY27 organic NIM contraction could be marginally higher than its earlier guidance of 10-15 basis points because of an expected increase in funding costs in the third and fourth quarters, according to a report by Motilal Oswal Financial Services .

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