Bajaj Housing Finance Ltd Q1 FY26 Earnings Analysis

- The company expects sustained growth with a 26% AUM growth as of March 31, 2025. - Home Loans grew by 22%, Loan Against Property (LAP) by 28%, Lease Rental Discounting (LRD) by 24%, and Developer Finance by 49% in the recent quarter. - Disbursements increased by 25% YoY for the quarter. - Near Prime and Affordable Housing segment (SBU) is growing steadily and aligned with future business goals, focusing on organic growth. - The developer finance portfolio shows no structural decline in conversion rates despite fewer launches. - Management plans to invest in expanding the SBU and non-top six markets for future growth. - Cost efficiencies are improving with OPEX to NTI reducing from 27.1% to 21.7% in Q4 FY25. - They anticipate a 10-15 bps compression in net interest margin due to cost and yield dynamics but expect profitability to be maintained through portfolio mix benefits.

- Net Total Income grew by 23% in FY25; Pre-provisioning Operating Profit up 28% YoY; PAT grew 25% for the year. - Management expects some moderation in quarterly growth rates as the company scales, reflecting natural normalization post high growth phase. - Focus on organic growth in affordable and near prime segments with limited reliance (10-12%) on balance transfers to build a strong purchase transaction mix. - Continued investment in management and new business units (Near Prime, Affordable Housing, and non-top six markets) to support future growth. - Anticipates 10-15 bps NIM compression next year due to market dynamics but plans to mitigate through asset mix changes and higher developer finance share. - OPEX to NTI improved to 21.7% in Q4 FY25; cautious spending on strategic areas to sustain growth and quality. - The company maintains medium-term guidance without changes, indicating steady growth trajectory.

- No plans to raise new capital in FY26 as leverage is 5.1-5.2, and raising money below 7.5 leverage is not advisable for a mortgage company. - No primary capital raising expected for the next 1.5 to 2 years. - Potential consideration for secondary offerings by Bajaj Finance shareholders at the appropriate time. - Continued investment in management team and expansion efforts, particularly in the Near Prime and Affordable Housing SBU and non-top six markets. - Incremental investments are focused on organic growth rather than acquisitions in the affordable/near prime segment. - Strategy includes building purchase transaction mix over riskier balance transfers. - Investment activities also include opportunistic portfolio purchases for margin expansion.

- No plan to raise new capital (equity) in FY26 as leverage is at 5.1-5.2, and it is not advisable to raise money below 7.5 leverage. - No primary equity issuance expected for the next 1.5-2 years. - Possibility of a secondary offering from Bajaj Finance shareholders could be considered later, but no direct primary fundraise planned. - On debt side, the company actively manages ALM and liabilities but specific new debt fund raising plans are not mentioned explicitly in the text. - The company raised variable and fixed rate NCDs last year; the borrowing mix is well diversified with instruments like money market, bank borrowings, and NHB refinance. - Any future debt raising will be decided based on interest rate views and calibrated cost-benefit analysis.

- The transcript does not explicitly mention the current or expected orderbook or pending orders for Bajaj Housing Finance Limited. - Discussions primarily focus on project numbers related to financed projects: Atul Jain corrected Shreepal Doshi that the number of projects financed is 798, not 758. - No specific figures on orderbooks or pending orders were provided. - The conversation centers around enquiry to conversion rates, sales slowdowns, inventory ratios, and financing costs, but not orderbook data. - Hence, detailed or quantified current or expected orderbook or pending orders information is not disclosed in the provided transcript.