Bajaj Finance Annual Report 2025-26: A Review

Official report: Get the Bajaj Finance Annual Report 2025-26 from the company's website. This page is The Footnotes' independent review of it.

Verdict: Bajaj Finance has a five-year plan you can hold it to, and a highlights page that leaves out the year's biggest cost. The most useful page for anyone judging the loan book is a note to the accounts on page 342. The front section never points to it. Score: 20 of 35.

This is not an integrated report, and it doesn't claim to be. It has a 32-page Corporate Overview (pp. 2-32), statutory reports including a 47-page MD&A and the BRSR (pp. 33-223), and the accounts (pp. 225-479). There is no "About this report" page, no capitals and no value creation model. The BRSR sends readers to a separate ESG Report for materiality, the capitals and targets. We still score it on the same card as everyone else, because the card measures what a reader can learn, not compliance. Page numbers are the printed ones. Screenshots are small excerpts reproduced for review and remain the copyright of Bajaj Finance Limited. There is also a digital edition.

The profit on page 2 is not the profit in the accounts

The highlights spread leads with profit after tax of ₹20,689 crore, up 24%, and ROE of 19.2%, "up from 19.1%". An asterisk excludes three things: an extra ₹1,406 crore of expected credit loss provision from introducing a floor on loss given default, ₹142 crore of management and macroeconomic overlays, and a ₹265 crore Labour Codes charge.

Reported consolidated PAT was ₹19,332 crore, up 15%. Reported ROE fell from 19.19% to 18.05%. That is a ₹1,357 crore gap between the profit most readers see and the profit in the accounts.

The MD&A (p. 37) shows why this matters. Impairment on financial instruments rose 34% to ₹9,482 crore. That is faster than net interest income (up 21%), operating expenses (up 19%) or pre-impairment profit (up 22%). Credit cost is the fastest-growing line in the business. For a lender, a provisioning change that raises it is not a one-off to be stripped out. It is the cost of the loans.

To be fair, the report doesn't hide the reported numbers. They are in the Chairman's letter (p. 5), in Table 6 (p. 50), and the strategy table uses 18.1% as its ROE baseline. But the highlights page is the one most people read, and it should lead with the accounts.

The page that matters most is 342

Note 54 to the standalone accounts includes a sectoral exposure table that RBI rules require. It is the clearest picture of where the loan book is under strain, and nothing in the first 300 pages mentions it.

Source: Bajaj Finance Limited, 39th Annual Report 2025-26, note 54, p. 342. Gross NPAs as a percentage of total exposure in each sector.

The picture is mixed, and that makes it more useful. Consumer lending, the core of the brand, improved. Small-business lending got clearly worse, with the bad-loan ratio for small service businesses roughly doubling. The MD&A talks about tightening underwriting and the "Lowest Risk Company" ambition. It would be more convincing if it said which books had got riskier and what was being done about them.

A strategy you can hold them to

The Long Range Strategy 2026-30 (pp. 16-19) rests on three priorities: customer centricity, technology leadership, and being the "Lowest Risk Company in India". The MD&A then prints something most strategy pages in Indian reports don't: a table of FY2026 values against FY2030 targets (p. 39).

Customer franchise of 119.33 million against 200 to 220 million. 4,098 locations against 4,600 to 4,900. ROE of 18.1% against 19% to 21%. PAT per cross-sell franchise of ₹2,740 against ₹3,700 to ₹3,900. A reader can check these in 2030.

One label is wrong: the last row says "Profit per customer (PPC)" with values of 6.07 and 6.5 to 7.5. Those are products per customer.

The execution snapshot on the next page (p. 40) is the most specific page in the front half of the report:

• Gold loans were the fastest-growing book. Bajaj opened 313 branches, taking the total to 1,507, and gold loan AUM rose 115% to ₹17,831 crore.
• Commercial vehicle loans grew from ₹942 crore to ₹2,352 crore, up 150% (p. 46).
• AI in lending: 27 conversational AI bots led to disbursals of over ₹5,500 crore, and 44% of document checks are automated.

This is the kind of detail that makes "FINAI" more than a slogan. The Chairman's letter (pp. 4-7) adds that AI converted 52 million voice logs to text, which supported about ₹700 crore of loans.

The Managing Director who left in July

Anup Saha became Managing Director on 1 April 2025, for a term to March 2028. He resigned on 21 July 2025 "due to personal reasons", and Rajeev Jain was re-designated Vice Chairman and Managing Director (p. 84).

The Directors' report records this correctly. Nothing in the Corporate Overview does. The Chairman's letter opens with Middle East tensions and the Strait of Hormuz, but never mentions that the company's chief executive changed after four months. Rajeev Jain doesn't write a letter either.

The rest of the governance disclosure is complete. The Board had ten directors at 31 March 2026, seven of them independent and one a woman (p. 122). The ESG Priorities page (p. 23) headlines a "Board-approved ESG Committee", but the BRSR (p. 171) shows that committee is made up of senior management. The Board reviews ESG performance once a year. There is no Board statement of responsibility for the report.

A ₹5 lakh crore lender whose biggest emission is staff commuting

The BRSR is inside the report and SGS India gives reasonable assurance on BRSR Core (statements on pp. 219-222). Scope 1 was 6,665.65 tCO2e and Scope 2 was 37,769.93 tCO2e, both up on the year (p. 197). Scope 3 jumped from 20,452 to 102,679 tCO2e because new categories were added, and the BRSR says so (p. 201).

The SGS verification statement breaks Scope 3 down by category (p. 222). The largest is employee commuting, at 63,124 tCO2e, about 61% of the total. Business travel is 19,424. What is missing is Category 15: the emissions financed by a loan book of over ₹5 lakh crore. For any lender that is the number that matters, and HDFC Bank already measures its own.

Other gaps:

• Renewable energy is 0.30% of consumption: 803.59 GJ out of 268,251.85 GJ (p. 195).
• No emissions target of any kind.
• Materiality: a table of 19 issues (pp. 165-169) with no date or method.
• Next year's commitments (p. 170) are six items, including reforestation at Satara and 15,000 solar loans.

Nineteen years of numbers

The back half of the MD&A is the strongest part of the report. Chart D (p. 51) plots ROA and ROE for 12 years and shows the unflattering trend: ROE from 23.5% in FY2023 to 18.1% in FY2026. Table 7 prints adjusted and reported returns on adjacent lines.

Table 16 (p. 79) gives 19 years of consolidated AUM, income, costs, provisions and profit, from FY08 to FY26, with footnotes on changes in accounting basis. It is set sideways on a portrait page, but no other report we have reviewed goes back this far.

One slip reached the Directors' report: it lists "Number of new loans booked: 119 million" (p. 83). That is the customer franchise. New loans were 52.45 million.

Reading it on screen

The PDF is built for screens. The contents page is hyperlinked, section tabs link to each part, and almost every page is a single page. The HTML edition is searchable. Against that: the PDF has no bookmarks, never mentions the HTML edition, and its text layer turns the rupee symbol into letters ("C", "L" or "K"). A search for "₹" finds nothing, and a screen reader reads amounts wrongly.

What other companies can copy

• A current-versus-target strategy table (p. 39). One row per strategic metric, today's value, the five-year target, and reported ROE as the baseline.
• A long financial record (p. 79). Nineteen years, with footnotes where the accounting basis changed.
• A chart that shows the bad years (p. 51). Twelve years of ROE, falling, printed anyway.
• An execution snapshot with numbers (p. 40). Branches opened, AUM growth, bots live and loans disbursed, product by product.
• Explain why an emissions figure jumped (p. 201). Bajaj says which Scope 3 categories were added.

And what not to copy: adjusted profit as the headline when the adjustment is credit cost, a CEO change left out of the narrative, and asset-quality stress left in a note to the accounts.

The score

How it compares

Every review on The Footnotes uses the same seven-point card, so scores can be compared. Scores are editorial opinion of the published document.