The 22% year-on-year AUM growth to ₹4,85,900 crore represents a substantial acceleration in Bajaj Finance's asset base, driven by robust loan origination and improved credit quality[1]. Breaking down the growth drivers: new loans booked at 13.90 million units reflect a 15% increase, indicating strong demand across personal loans (highest volume driver), home loans, auto loans, and other retail segments[2]. The sequential AUM growth during Q3 FY26 demonstrates quarter-on-quarter momentum, suggesting that the festive season demand has extended into the December quarter. Comparative analysis shows that Bajaj Finance's 22% AUM growth outpaces several peer NBFCs and small finance banks, positioning it as a growth leader in the sector. The company's ability to maintain 15% new loan growth while managing credit quality underscores operational efficiency and disciplined underwriting standards. Deposit mobilization at ₹71,000 crore provides a crucial funding advantage, as deposit-funded loans typically carry lower cost of funds compared to wholesale borrowing, thereby improving net interest margins and profitability. The company's 5-year CAGR in profit growth of 25.9% demonstrates sustained earnings power and operational leverage[5]. These metrics collectively validate Bajaj Finance's business model and market positioning in India's consumer lending ecosystem.

Bajaj Finance's customer franchise reached 115.40 million as of December 31, 2025, up from 97.12 million a year earlier, representing an 18.8% year-on-year increase[2]. This expansion of 47.6 lakh customers during Q3 FY26 alone indicates accelerated customer acquisition momentum, likely driven by festive season promotional campaigns and improved digital onboarding capabilities. The company's ability to add nearly 18 million customers annually demonstrates successful market penetration across tier-2 and tier-3 cities, where credit penetration remains low and growth potential is substantial. Customer acquisition at this scale requires robust distribution infrastructure, which Bajaj Finance has built through branch networks, digital platforms, and partnerships with retailers and dealers. The expansion of the customer base from 97.12 million to 115.40 million represents a 12.7 million net addition over the year, with Q3 contributing 47.6 lakh, suggesting acceleration in customer onboarding. This metric is particularly significant as it indicates not just loan growth but also diversification of the customer base, which reduces concentration risk and improves portfolio stability. Higher customer base also provides cross-selling opportunities for additional products including credit cards, insurance, and wealth management services, creating multiple revenue streams from each customer relationship.

Bajaj Finance's growth metrics demonstrate consistent outperformance relative to peer NBFCs and small finance banks across multiple dimensions. The company's 22% AUM growth to ₹4,85,900 crore represents robust capital deployment, with new loans booked at 13.90 million units reflecting 15% year-on-year growth[1][2]. This growth trajectory is particularly impressive given the company's large asset base, as maintaining double-digit growth rates at scale is operationally challenging. In comparison, Bandhan Bank reported 10% loan growth, Ujjivan Small Finance Bank achieved 21.6% loan book expansion, and Equitas Small Finance Bank grew gross advances by 15.86%, indicating that Bajaj Finance's 15% new loan growth is competitive within the sector[1]. The company's customer franchise expansion to 115.40 million from 97.12 million represents an 18.8% year-on-year increase, which exceeds typical industry growth rates and indicates successful market penetration[2]. Bajaj Finance's deposit mobilization at ₹71,000 crore provides a funding cost advantage compared to wholesale borrowing, thereby improving net interest margins and profitability. The company's 5-year profit CAGR of 25.9% demonstrates sustained earnings power and operational leverage, indicating that revenue growth is translating into bottom-line profitability[5]. These metrics collectively position Bajaj Finance as a growth leader within the NBFC sector, with superior scale, customer acquisition, and profitability dynamics compared to peer institutions.

Bajaj Finance's deposit base of ₹71,000 crore provides a significant competitive advantage in an environment of rising funding costs and wholesale market volatility[1]. Deposits are typically the lowest-cost source of funds for financial institutions, with deposit rates significantly lower than wholesale borrowing rates or commercial paper issuances. The company's ability to mobilize ₹71,000 crore in deposits indicates strong customer confidence and brand recognition, enabling it to reduce reliance on expensive wholesale funding. In comparison, peer NBFCs without significant deposit bases must rely on commercial paper, bank borrowings, and securitization to fund loan growth, which typically carry higher costs. This funding advantage translates into superior net interest margins, as the company can lend at competitive rates while maintaining attractive spreads. The deposit mobilization also provides stability to the liability side of the balance sheet, reducing refinancing risk and improving financial flexibility. As interest rate cycles evolve and wholesale funding costs fluctuate, Bajaj Finance's deposit base provides a cushion against funding pressures. The company's deposit growth trajectory, combined with AUM expansion, indicates that customer acquisition is not limited to lending but extends to liability products, creating multiple revenue streams and improving customer lifetime value. This funding advantage is a key differentiator that enables Bajaj Finance to maintain competitive lending rates while preserving profitability.

Bajaj Finance's Q2 FY26 profitability demonstrates strong operational leverage, with profit growth (22%) matching AUM growth, indicating stable or improving credit quality and cost management[2]. Net profit of ₹4,875 crore represents a substantial increase from ₹4,000 crore, with the company achieving profit growth despite a challenging macroeconomic environment characterized by elevated interest rates and cautious consumer sentiment. Net interest income growth of 22% to ₹10,785 crore indicates that the company is maintaining attractive spreads between lending and borrowing rates, benefiting from its deposit-funded business model. The 21% growth in pre-provisioning operating profit to ₹8,874 crore suggests that the company is managing operating expenses efficiently, with revenue growth outpacing cost growth. This operational leverage is critical for NBFC profitability, as it indicates that incremental growth is translating into disproportionate profit expansion. The company's ability to grow profits at 22% while growing AUM at 22% indicates stable asset quality and provisioning requirements, suggesting that credit losses are not accelerating despite rapid loan growth. The dividend payout ratio of 17.4% indicates a balanced approach to capital allocation, with the company retaining approximately 82.6% of earnings for growth investments and capital adequacy maintenance. These profitability metrics establish Bajaj Finance as a highly profitable and efficient NBFC, with strong earnings power and the ability to generate consistent returns for shareholders.

Bajaj Finance's net total income growth of 20% to ₹13,170 crore, which exceeds NII growth of 22%, indicates diversified revenue streams beyond interest income[2]. The differential between net total income growth (20%) and NII growth (22%) suggests that fee-based revenue and other income streams are growing at rates comparable to or potentially lower than interest income, indicating a portfolio heavily weighted toward spread-based earnings. However, the company's large customer base of 115.40 million provides substantial cross-selling opportunities for high-margin products including credit cards, insurance, wealth management, and other financial services[2]. The company's deposit mobilization of ₹71,000 crore indicates that customer relationships extend beyond lending to include liability products, which typically generate fee income through account maintenance charges, transaction fees, and wealth management services[1]. As the company matures and its customer base grows, fee-based revenue is likely to accelerate, providing earnings growth that is less dependent on credit spreads and more resilient to interest rate cycles. The company's ability to generate ₹13,170 crore in net total income from a diversified portfolio of lending, deposits, and fee-based services demonstrates the strength of its business model and the value creation potential of its large customer franchise.

Bajaj Finance's Q3 FY26 performance identifies several growth catalysts that could drive sustained earnings expansion and stock price appreciation over the medium term. First, India's consumer credit penetration remains significantly below developed market levels, indicating substantial growth runway as incomes rise and financial inclusion deepens. The company's successful market penetration into tier-2 and tier-3 cities, evidenced by the expansion of the customer base to 115.40 million, positions it to capture this structural growth opportunity[2]. Second, the company's deposit mobilization of ₹71,000 crore provides a funding cost advantage that should support margin stability and profitability growth even in a rising interest rate environment[1]. Third, the company's large and growing customer base provides cross-selling opportunities for high-margin products including credit cards, insurance, and wealth management services, which could accelerate fee-based revenue growth. Fourth, the company's operational leverage, demonstrated by 22% profit growth matching 22% AUM growth, indicates that incremental growth is translating into disproportionate earnings expansion[2]. Fifth, the company's 5-year profit CAGR of 25.9% demonstrates consistent earnings power and the ability to navigate credit cycles while maintaining shareholder value[5]. These growth catalysts collectively support a positive medium-term outlook for Bajaj Finance, with potential for sustained earnings growth and stock price appreciation.

While Bajaj Finance presents attractive growth prospects, investors should implement risk mitigation strategies to protect portfolio value and optimize risk-adjusted returns. First, monitor credit quality metrics including loan loss ratios, delinquency rates, and provision coverage ratios to ensure that rapid growth is not accompanied by deteriorating asset quality. Rising interest rates could increase consumer default rates, particularly in unsecured lending segments including personal loans and credit cards. Second, track regulatory developments affecting NBFC lending practices, as changes in lending norms, interest rate caps, or consumer protection regulations could impact profitability and growth prospects. SEBI and RBI regulatory actions should be closely monitored for any adverse impacts on NBFC operations. Third, diversify exposure within the financial services sector by combining Bajaj Finance with other NBFCs, banks, and insurance companies to reduce concentration risk. Fourth, maintain a disciplined investment approach by setting clear entry and exit price targets based on fundamental valuation metrics including price-to-earnings ratios, price-to-book ratios, and dividend yield. Fifth, implement a systematic rebalancing strategy to maintain target portfolio allocations and lock in gains during periods of strong stock price appreciation. These risk mitigation strategies should help investors capture Bajaj Finance's growth potential while managing downside risks and optimizing long-term wealth creation.

Bajaj Finance's valuation should be assessed relative to peer NBFCs and financial services companies to determine relative attractiveness and investment suitability. The company's 5-year profit CAGR of 25.9% indicates superior earnings growth compared to broader market indices and many peer financial services companies[5]. For valuation purposes, investors should calculate forward price-to-earnings ratios based on projected earnings growth, incorporating assumptions about credit growth, asset quality, and profitability margins. The company's dividend yield of approximately 17.4% payout ratio suggests potential dividend growth as earnings expand, providing income-oriented investors with attractive return prospects[5]. Comparative analysis should include peer NBFCs including HDFC Bank, Kotak Mahindra Bank, and smaller NBFCs, assessing relative valuation multiples and growth prospects. Bajaj Finance's market leadership position, operational efficiency, and deposit-funded business model should support premium valuation multiples compared to smaller, less efficient competitors. However, investors should avoid valuation excesses and maintain disciplined entry points aligned with fundamental value creation potential. A comprehensive valuation framework incorporating discounted cash flow analysis, relative valuation multiples, and sensitivity analysis should guide investment decisions and portfolio positioning.

Investors should establish a comprehensive monitoring framework to track Bajaj Finance's ongoing performance and identify early warning signals of deteriorating fundamentals or changing market dynamics. Critical metrics to monitor include: (1) Quarterly AUM growth rates and new loan origination volumes, which should remain in double-digit territory to support earnings growth; (2) Customer acquisition rates and franchise expansion, which should continue at elevated levels to indicate successful market penetration; (3) Deposit mobilization and funding cost trends, which are critical for margin stability and profitability; (4) Credit quality metrics including loan loss ratios, delinquency rates, and provision coverage ratios, which should remain stable or improve to indicate sound underwriting; (5) Net interest margins and fee-based revenue growth, which should expand to support profitability growth; (6) Regulatory developments and compliance issues, which could impact operations and profitability; (7) Competitive dynamics and market share trends, which could indicate shifts in market positioning; (8) Macroeconomic indicators including interest rates, inflation, and consumer spending, which impact credit demand and default rates. Investors should establish quarterly review cycles to assess performance against expectations and adjust portfolio positioning as warranted by changing fundamentals or market conditions. This disciplined monitoring approach should help investors identify investment opportunities and risks early, enabling proactive portfolio management and optimized risk-adjusted returns.