Bajaj Finance Q2 Update: Growth Momentum Returns as AUM Jumps 24% YoY

Bajaj Finance has started Q2 FY26 on a strong note. The company’s latest business update (not results) shows a clear pickup in activity, with growth accelerating across key segments. Coming after a cautious Q1, this update has caught the market’s attention, and may signal a shift in sentiment going into the festive season. The company’s share is trading around 2% higher today following the update.

Q2 Business Update, Strong Growth Across the Board

On 3rd October, Bajaj Finance shared its operational performance for the quarter ended September 2025

• Customer franchise grew to 110.6 million, adding 4.1 million new customers in a single quarter.
• New loans booked rose 26% YoY to 12.17 million, indicating strong origination activity.
• AUM climbed to ₹4.62 lakh crore, with a quarterly increase of ₹20,800 crore.
• The deposit book continued to expand steadily.

While these numbers are provisional and will be audited at the time of Q2 results, they give a clear directional signal, Bajaj Finance’s growth engine seems to be picking up speed again.

Why These Numbers Matter

This pickup in business activity isn’t happening in isolation. Several factors have come together to create a more favourable environment for lenders like Bajaj Finance:

1. GST 2.0 Has Eased Regulatory Uncertainty

Earlier this year, the upcoming GST 2.0 regime had created uncertainty around compliance and reporting for NBFCs. With the new system now rolled out, there’s more clarity, better data, and less leakage, creating a supportive environment for formal lenders.

2. Credit Demand Is Holding Up

Despite global macro concerns, domestic credit demand has remained strong. Add to that the festive season tailwinds, and lenders are seeing robust traction across consumer and SME segments.

3. Strong Customer Acquisition = Future Growth

Adding over 4 million customers in a single quarter is no small feat. This distribution strength is one of Bajaj Finance’s biggest advantages, and often a leading indicator of loan growth in subsequent quarters.

Looking Back: Q1 Was a Period of Pessimism

This Q2 momentum is particularly notable because Q1 was subdued.

• Loan growth had moderated, operating costs were elevated, and management commentary reflected caution.
• Regulatory uncertainty around GST 2.0 weighed on sentiment.
• The stock corrected meaningfully post Q1 results, as investors worried about margins, credit costs, and growth slowing down.

Back then, the Street’s mood was clearly cautious. But this Q2 update suggests that some of those worries may be fading. Read our full Q1 analysis here

Market Reaction & What’s Next

Investors welcomed the update, Bajaj Finance’s stock was up around 2% after the announcement. With the next earnings release due later this month, the focus will shift to:

• Margins (NIMs), Will the pick-up in growth also bring stability in margins?
• Asset Quality, Can Bajaj Finance sustain growth without compromising credit discipline?
• Credit Costs & Profitability, Will faster loan growth reflect in stronger bottom-line performance?

If the answers are positive, analysts may revise their estimates upwards, setting the stage for a stronger H2.

Risks & Watchpoints

While the Q2 update is encouraging, it’s important not to get carried away by growth alone. A few factors warrant close monitoring in the coming quarters:

1. Margin Pressure: In Q1, Bajaj Finance saw some moderation in NIMs due to higher funding costs and competition. If deposit growth lags or pricing stays aggressive, margins could remain tight even as volumes rise.
2. Credit Costs: A 26% jump in loan bookings is strong, but rapid growth — especially in unsecured segments can bring higher credit risk. The update doesn’t include asset quality data, so actual Q2 results will be key.
3. Regulatory Shifts: GST 2.0 has reduced uncertainty, but broader NBFC regulations are still tightening. Any unexpected rules could affect growth or profitability.
4. Festive Execution: The festive period is crucial. Scaling up while maintaining underwriting discipline will be critical to sustaining momentum.

Bottom Line

Bajaj Finance’s Q2 FY26 business update offers early signs of a turnaround. With regulatory uncertainty easing and credit demand picking up, the company seems well-positioned for a stronger second half.

While risks remain, especially around margins and credit costs, the Q2 update shows that momentum is back, and the Street is beginning to take notice.

Track Bajaj Finance on INDmoney to stay updated on its Q2 results and expert analysis.

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