Bajaj Housing Finance Ltd Q2 FY26 Earnings Analysis

- Medium-term growth projection for Bajaj Housing Finance is around 24-26%, while near-term guidance is reduced to 21-23% due to competitive pricing and higher attrition, not demand weakness. - Attrition and market disruption from recent rate cuts are expected to normalize within 4-6 months, allowing a return to normal growth trajectory by Q3 of the current fiscal year. - Disbursement growth remains positive, with retail disbursements growing by 12% YoY despite flat AUM growth due to elevated attrition. - No significant downside risks factored beyond current conservative stress tests, with only one additional 25 bps rate cut assumed in the year. - Growth in near prime and Affordable segments is cautious but robust, with enough market demand to expand over time. - Strategic focus on home loans prioritized before rebuilding smaller ticket LAP; no shift to higher ticket sizes but market trends favor larger ticket loans.

- Bajaj Housing Finance expects AUM growth to be moderate in near term (FY ‘25 & FY ‘26), with growth guidance revised downward by ~300 bps due to higher competitive pricing and attrition rather than demand reduction. - Disbursement growth is positive (~12% YoY for home loans in Q1), but AUM growth is flat due to higher attrition from market competition and rate cuts. - Management anticipates normalization of attrition and competitive dynamics by Q3 FY ‘26, expecting growth to return closer to medium-term targets (~24-26% range) thereafter. - Margins (NII) are expected to remain stable in FY ‘26 despite some NTI (non-interest income) moderation due to lower investment income. - Margin compression is expected at 15-20 bps for FY ‘26 with potential mitigations through product mix adjustments. - Conservative assumptions for credit costs factored in; provision coverage remains healthy. - Overall, confidence is expressed for improving operating earnings and return to normal growth trajectory post Q3 FY ‘26.

- Bajaj Housing Finance does not indicate any immediate or near-term capex or strategic investment plans in the transcript. - Focus currently is on building the Affordable and near-prime business as a separate Strategic Business Unit (SBU), which involves investment primarily in human resources and channel building rather than capital expenditure. - Expansion in non-metro markets and Affordable/near-prime segments is underway, with ongoing investments in these areas expected to continue for the next 1-2 quarters and possibly beyond. - No mention of co-lending or inorganic growth strategies; the company prefers organic growth. - Investments so far have been directed toward growing employee base in SBU and geographic expansion rather than fixed asset capex. - Emphasis is on operational efficiencies and investments in people and distribution channels rather than large capital outlays.

- No explicit mention of current or planned new fundraising through debt or equity is provided in the disclosed Q&A. - The company discussed borrowing strategies, indicating a preference for NCDs over bank borrowings due to cost advantages (about 20 bps cheaper currently), but no new fundraise announcement. - Capital raised previously included rights issues and a public issue deployed into investments; current investment levels are lower. - Management indicated a focus on organic growth and cautious market expansion without explicitly stating new equity or debt fundraisings. - The company is building capital efficiency by reducing assignments in the current year. - Overall, no direct indication of imminent or planned fresh capital raises through debt or equity is mentioned in this transcript.

The provided transcript from Bajaj Housing Finance Limited does not contain any specific information regarding the company's current or expected order book or pending orders. The discussion primarily focuses on portfolio composition, growth guidance, competitive dynamics, borrowing costs, attrition, ticket sizes, product strategy, and margin outlook. If you require details on the current or expected order book or pending orders, such information may not be available in this document or may be covered under a different section not included here.