Evaluate Bajaj Finance by asking whether the price you would pay is justified by sustainable earnings and book value, while checking whether growth is keeping pace with credit risk, funding costs and capital needs. The latest company snapshot available here is for Q1 FY27, ended 30 June 2026; it shows strong income growth and improved year-on-year headline asset-quality ratios, but does not establish a current share price or valuation multiple. Refresh market data before deciding whether the shares look cheap or expensive.
Start with the price, the returns and the risk
A useful assessment brings together three questions: what valuation the market is assigning, how much profitable growth the lender can sustain, and whether credit losses are being adequately recognized and funded. No one metric answers all three. A high growth rate does not by itself make a stock attractive, and a low reported non-performing asset ratio does not capture every source of risk.
Use like-for-like figures: consolidated with consolidated, and the same quarter or fiscal-year period when comparing trends. When discussing valuation, state both the measurement date and whether earnings are reported or adjusted. The company’s latest available disclosures provide operating figures, not a current market price or peer multiples.
What the latest company figures show
| Measure | Reported figure | Period and basis |
|---|---|---|
| Assets under management (AUM) | ₹509,975 crore, up 22% year on year | Bajaj Finance Limited, FY2026 annual report |
| Net interest income (NII) | ₹44,110 crore, up 21% | Bajaj Finance Limited, FY2026 chairman’s letter |
| Net total income | ₹53,324 crore, up 21% | Bajaj Finance Limited, FY2026 chairman’s letter |
| Reported profit after tax (PAT) | ₹19,332 crore, up 15% | Bajaj Finance Limited, FY2026 chairman’s letter |
| Adjusted PAT | ₹20,689 crore, up 24% | FY2026 chairman’s letter; company-adjusted measure |
| GNPA / NNPA | 1.01% / 0.41% | Consolidated, FY2026 annual report |
| NII / net total income | ₹12,571 crore, up 23% / ₹15,224 crore, up 22% | Consolidated, Q1 FY27, quarter ended 30 June 2026 |
| PAT / annualised ROE | ₹6,081 crore, up 28% / 20.4% | Consolidated, Q1 FY27, quarter ended 30 June 2026 |
| GNPA / NNPA | 0.96% / 0.39%, versus 1.03% / 0.50% a year earlier | Consolidated, as of 30 June 2026 versus 30 June 2025 |
| Stage-3 provision coverage | 60% | Consolidated, Q1 FY27 presentation |
| Loan losses and provisions | ₹1,993 crore, including ₹296 crore management and macroeconomic provision | Consolidated, Q1 FY27 |
| Capital adequacy / Tier 1 capital | 20.90% / 20.01% | Consolidated, as of 30 June 2026 |
Figures are company-reported and should be read with their stated period and basis. The Q1 FY27 presentation is available from Bajaj Finance’s Q1 FY27 investor presentation; annual figures are in the FY2026 annual report and FY2026 chairman’s letter.
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How to assess asset quality beyond GNPA and NNPA
Read the NPA ratios as snapshots
Gross non-performing assets (GNPA) and net non-performing assets (NNPA) were lower year on year in the Q1 FY27 consolidated presentation: 0.96% and 0.39% at 30 June 2026, compared with 1.03% and 0.50% at 30 June 2025. These point-in-time ratios are encouraging, but they do not alone reveal whether borrowers are beginning to miss payments, whether problem loans are moving between risk categories, or how losses may evolve.
Check credit costs and provisions together
Q1 FY27 loan losses and provisions were ₹1,993 crore, including a ₹296 crore prudent management and macroeconomic provision. The presentation separately gives ₹1,697 crore excluding that overlay and says this was down 14% year on year. Keep the reported total and the company’s adjusted comparison distinct; excluding a provision changes the comparison and does not make the reported charge disappear.
Review stage 2 and stage 3 exposures alongside GNPA and NNPA, then examine provisions and coverage. The reported 60% stage-3 provision coverage offers context on reserves against stage-3 assets, but should not be treated as a standalone measure of the eventual loss rate.
Put management claims in context
In the FY2026 chairman’s letter, Sanjiv Bajaj described the company as “among the lowest risk companies in India,” citing GNPA of 1.01% and NNPA of 0.41%. That is management’s characterization, not an independent comparison. To test a relative claim, compare peers using the same period and consistent asset-quality definitions, and include credit costs, stage migration and provisioning rather than relying on headline ratios alone.
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Test whether growth translates into durable returns
Compare loan-book growth with income growth
FY2026 AUM rose 22% year on year to ₹509,975 crore. In the same fiscal year, the chairman’s letter reported NII growth of 21% to ₹44,110 crore and net total income growth of 21% to ₹53,324 crore. In Q1 FY27, consolidated NII grew 23% to ₹12,571 crore and net total income grew 22% to ₹15,224 crore. These figures show strong reported growth, but an investor should assess whether it is profitable after funding costs, operating expenses and credit losses.
Judge profits on the basis that matters
FY2026 reported PAT was ₹19,332 crore, up 15%. The chairman’s letter also reported adjusted PAT of ₹20,689 crore, up 24%; that company-adjusted figure excludes an additional ECL provision of ₹1,406 crore, management and macroeconomic overlays of ₹142 crore, and a one-time labour-code charge of ₹265 crore. Start with reported earnings, then show the adjusted measure separately and identify each excluded item. For a P/E calculation, using adjusted rather than reported earnings produces a different multiple.
For Q1 FY27, consolidated PAT rose 28% to ₹6,081 crore and annualised ROE was 20.4%, compared with 19.0% in Q1 FY26. A single quarter’s annualised return is not a forecast. Consider whether returns remain sustainable after normal credit costs, the cost of funding and the capital required to support further growth.
Follow funding and capital
For a lender, the cost and availability of funding affect the spread between what it earns on loans and what it pays to finance them. Track funding costs and NII over time rather than assuming that rapid AUM growth will maintain margins. Also follow capital adequacy: the consolidated ratios at 30 June 2026 were 20.90% for capital adequacy and 20.01% for Tier 1 capital. Capital supports resilience and future lending capacity, but growth can require more of it; assess the trend and regulatory context in subsequent filings.
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How to calculate P/E and P/B without overstating what they mean
Price-to-earnings (P/E)
Calculate P/E using a dated market capitalization (or share price and matching share count) divided by earnings for a clearly stated period. Specify whether earnings are trailing, forecast, reported or adjusted. If you use an adjusted PAT basis, disclose the adjustments; do not compare that multiple with a peer’s reported-earnings multiple as if the definitions matched.
Price-to-book (P/B)
Calculate P/B by dividing market capitalization by the corresponding shareholders’ book value, using a consistent date and consolidated or standalone basis. Interpret it alongside sustainable ROE, asset quality and capital needs: a premium or discount to book value is not self-explanatory. Higher sustainable returns may support a higher multiple, while weaker credit performance or greater capital requirements can undermine the case.
Refresh the market comparison
No current share price or peer multiple is established in the company operating snapshot above, so it cannot support a present-tense claim that Bajaj Finance is cheap or expensive. Before drawing that conclusion, obtain a date-stamped price and current filings, then compare with Indian lenders or NBFCs whose business mix, fiscal period and accounting basis are genuinely comparable. The company’s investor-relations page points to results, quarterly calls, annual reports and exchange filings; verify whether later disclosures have been published before using the figures here.
A practical checklist before investing
- Record the price and date used, then calculate P/E and P/B from consistent market and financial data.
- Label the earnings basis clearly: reported first, then adjusted with each excluded item identified.
- Compare AUM growth with NII, net total income and PAT growth over matching periods.
- Track GNPA, NNPA, stage 2 and stage 3 movements, credit costs and provision coverage together.
- Review funding costs, ROE and capital adequacy to judge how repeatable growth and returns may be.
- For peers, align dates, fiscal periods, consolidated or standalone basis, product mix and asset-quality definitions.
- Revisit the latest quarterly results and material exchange filings rather than relying indefinitely on a past snapshot.
This framework is for evaluating company disclosures and market valuation; it is not an individualized investment recommendation.
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