- Bajaj Finance’s net profit fell 5.6% YoY, but underlying PAT rose 23% and AUM jumped 22%.
- Jio Financial Services doubled revenue YoY, yet profit slipped 9% as it reinvests for scale.
- Technicals show Bajaj Finance breaking a key resistance at 975, opening a path to 1,020.
- JFSL’s growth is powered by Reliance’s ecosystem, but volatility remains high.
- Conservative investors may favor Bajaj’s steady compounding; aggressive traders might chase JFSL’s upside.
You missed the warning signs in Bajaj Finance’s latest earnings—now’s the moment to act.
Why Bajaj Finance’s Margin Slide Still Signals a Compounder
Bajaj Finance reported a consolidated net profit of ₹4,066 crore, a 5.6% YoY decline. The drop is largely “optical” – higher Expected Credit Loss (ECL) provisions and one‑time labour code charges. Underneath, profit after tax (PAT) grew 23% thanks to an 18.2% rise in revenue to ₹15,965 crore and a 20.6% surge in Net Interest Income (NII) to ₹11,318 crore.
Key metric: AUM expanded to ₹4.84 lakh crore, a 22% increase, driven by 15% higher new loan disbursements (13.90 million vs 12.06 million). This scale‑up improves earnings visibility and lowers cost of funds, a hallmark of a proven compounder.
Historical context: In FY22, Bajaj Finance also posted a modest profit dip while AUM grew >20%. The stock rallied 45% over the subsequent 12 months as the market recognized the durable growth engine.
Competitor lens: Tata Capital’s loan book grew 12% YoY, lagging behind Bajaj’s 15% pace, while Adani Capital’s NII margin compressed due to higher funding costs. Bajaj’s diversified consumer, SME, and micro‑finance segments cushion sectoral shocks.
How Jio Financial Services’ Ecosystem Play Could Redefine NBFC Growth
Jio Financial Services (JFSL) posted revenue of ₹901 crore, a 106% YoY jump, and NII of ₹504 crore, up 140%. However, net profit fell 9% to ₹269 crore as the firm ploughed earnings into expanding its NBFC, asset‑management, payments, and insurance distribution arms.
The “platform‑scale optionality” narrative rests on Reliance’s massive retail base, data assets, and cross‑selling potential. JFSL’s asset‑management arm now holds ₹14,972 crore across ten schemes, with roughly one million retail investors.
Sector comparison: Peer NBFCs like HDFC Bank’s wholesale finance arm reported modest double‑digit revenue growth but maintained higher ROE due to mature credit portfolios. JFSL’s ROE is currently lower, reflecting its investment phase, but the upside of ecosystem synergies could compress this gap.
Historical parallel: In 2019, Paytm Payments Services entered the lending space with aggressive top‑line growth but negative earnings for years. Once its payments network reached scale, margins improved dramatically. JFSL may follow a similar trajectory, albeit with a stronger parent.
Sector‑wide Implications: NBFC Landscape in FY26
The NBFC sector is entering a bifurcated phase. Established players (Bajaj, Mahindra & Mahindra Financial Services) leverage deep loan books and stable NII growth. New entrants (JFSL, Paytm, PhonePe) chase market share via ecosystem integration, accepting short‑term profit erosion.
Regulatory backdrop: RBI’s tightening of capital adequacy norms in early FY26 raises the cost of aggressive expansion, favoring firms with robust capital buffers—Bajaj’s capital adequacy ratio stands at 20% versus JFSL’s 14%.
Macro trend: Consumer credit demand remains strong, with retail loan growth projected at 12% YoY through FY27. Digital onboarding and data‑driven underwriting will be key differentiators.
Technical Chart Insights: Bajaj Finance’s Breakout Above 975
Analyst Anshul Jain notes that Bajaj Finance’s price crossed the 975 resistance, breaking a lower‑high, lower‑low structure that capped upside. The daily chart now shows higher lows, indicating a nascent bullish trend.
Momentum indicators: The 14‑day Relative Strength Index (RSI) moved into the 55‑60 zone, away from oversold levels, while the Moving Average Convergence Divergence (MACD) histogram turned positive.
Risk parameters: Sustaining above 975 keeps the risk‑reward profile favorable, with a target zone around 1,020‑1,025. A drop back below 975 would invalidate the setup.
Investor Playbook: Bull and Bear Scenarios for Both Stocks
Bull case – Bajaj Finance
- Continued AUM expansion >20% YoY.
- Improving asset quality, low NPA ratios.
- Technical breakout holds, price reaches ₹1,030.
- Yield‑focused investors enjoy stable dividend yields (~1.2%).
Bear case – Bajaj Finance
- Further ECL provisioning erodes net profit.
- Regulatory caps on loan pricing compress NII margins.
- Breakout fails and price retests 925 support.
Bull case – Jio Financial Services
- Ecosystem synergies boost cross‑sell ratios, lifting associate income.
- Revenue growth sustains >100% YoY for the next 12‑18 months.
- Successful rollout of digital credit products improves ROE.
Bear case – Jio Financial Services
- Profitability remains negative as reinvestment outpaces cash flow.
- Competitive pressure from established NBFCs limits market share.
- Regulatory scrutiny on data‑driven lending could slow rollout.
Bottom line: If you prize steady compounding with clear visibility, Bajaj Finance aligns with a conservative risk appetite. If you can tolerate volatility for a potentially outsized upside driven by a tech‑powered ecosystem, JFSL presents a high‑growth, high‑risk play.