Conference Call Analysis

Executive Summary

===SUMMARY_START===

Bajaj Finance delivered a solid Q2 FY'26 performance with AUM growth of 24% to INR 462,261 crores, driven by secular expansion across businesses including gold loans, new car loans, CV, and tractor financing. However, management has adopted a more prudent stance and revised full-year AUM growth guidance downward to 22-23% (from 24-25%) due to risk-mitigation actions in MSME and revised guidance from subsidiary BHFL.

Detailed Analysis

Key Operational Highlights:

Customer franchise expanded to 110.64 million, with 4.13 million new customers added in Q2
Festive season disbursements were record 6.3 million loans (7.4 million for full festive period), up 27% in volume and 29% in value YoY
Opex to NII improved to 32.6% vs. 33.2% in Q2 prior year
Cost of funds improved 27 bps to 7.52%; FY'26 guidance: 7.5-7.55%
NIM remained flat QoQ, in line with Q1

Asset Quality & Credit Cost Concerns:

GNPA rose to 124 bps (from 106 bps YoY), with NNPA at 60 bps
Loan loss to average AUM: 2.05% (vs. 2.02% in Q1)
Management upgraded rural B2C/MFI from yellow to green management assessment
Credit costs were elevated in Q2 but vintage metrics (3 MOB, 6 MOB, 9 MOB) show significant improvement
Full-year FY'26 credit cost guidance: upper end of 1.85%-1.95% range

MSME Stress:

Management cut unsecured MSME volumes by ~25%, now guiding 10-12% growth for MSME in FY'26 (vs. prior expectations of higher growth)
Captive 2-wheeler/3-wheeler financing (1.5% of AUM) contributes 9% of loan losses and is being phased out
Restructuring largely completed at INR 288 crores in Q2; minimal further restructuring expected

FinAI Transformation:

8-9 months into implementation across businesses
442 AI voice bots live, contributing INR 2,000 crores of origination in Q2
85% of customer service resolutions handled by AI-powered bots in Q2
42% of digital banners and 100% of videos AI-generated
Expected to deliver cost and productivity benefits over next 12-18 months; 80 of 123 identified high-impact areas planned to go live by Feb '26

Subsidiary Performance:

BHFL: 24% AUM growth, 18% PAT growth, ROA 2.3%, GNPA 26 bps, NNPA 12 bps
BFSL: 40% AUM growth, 27% profit growth, 94,000 customers added in Q2

Management Structure:

Manish Jain elevated to fourth Deputy CEO, now responsible for BFSL MD role plus loans against security, commercial lending, and deposit businesses

Key Outlook:

Momentum in consumption patterns appears sustained post-festive season across product segments
Cost of funds expected to decline further with potential rate cuts in FY'27, with benefits to flow through then
Gold loans positioned for significant expansion: INR 16,000 crores by end FY'26, targeting INR 27,000-30,000 crores by March '27, with 900+ additional branches planned
Significant credit cost improvement expected in FY'27 driven by captive 2-wheeler rundown, MSME stabilization, and growth in lower-risk segments (gold loans, new vehicle finance)

===SUMMARY_END===

===MARKDOWN_START===

BAJAJ FINANCE LIMITED – Q2 FY'26 EARNINGS ANALYSIS

NBFC Strategic Assessment: Growth, Credit Quality, & AI-Driven Transformation

1. BUSINESS GROWTH

1.1 Assets Under Management (AUM) – Growth Trajectory & Guidance Revision

Consolidated AUM Growth: Bajaj Finance reported consolidated AUM growth of 24% to reach INR 462,261 crores in Q2 FY'26. However, management has adopted a more conservative posture and revised full-year AUM growth guidance downward to 22-23%, compared to the 24-25% guidance provided in January 2025.

Verbatim Guidance: "Assets under management grew 24% to INR 462,261 crores, led by secular growth across businesses." — Rajeev Jain, Vice Chairman and Managing Director

"In general, from a growth standpoint, if I look at the outlook, the company has decided to take a prudent and balanced stance on AUM growth for FY '26. And we now think the growth will be in the region of 22-23% as compared to our earlier assessment of 24-25% due to a set of risk actions that we have taken in MSME business, and the revised assessment provided by BHFL on its AUM growth for FY '26." — Rajeev Jain

Rationale for Guidance Downgrade: The revision reflects two material headwinds:

MSME Risk Mitigation: Management has aggressively cut unsecured MSME volumes by approximately 25% as a deliberate risk-first strategy, reducing MSME growth expectations to 10-12% for the full year.
BHFL Guidance Adjustment: The subsidiary has also revised its growth outlook downward.

This guidance adjustment is critical from an NBFC analyst perspective, as it signals management's prioritization of asset quality and portfolio resilience over topline growth—a prudent stance that contrasts with more aggressive peers and should be viewed favorably by credit-conscious investors.

1.2 Disbursement Activity & Customer Acquisition

Festive Season Performance – Record Momentum:

Management highlighted exceptional festive season performance, which provides a leading indicator for post-quarter consumption trends:

"The company disbursed a record 6.3 million loans, up 27% in volume and 29% in value over last year. This is a 37-day, right, Manish? 30, 30… 35-day period. It's Navratri to Bhai Dooj or 35-day peak kick-off of the festival and end of the festival season. Overall, festive period disbursements were 7.4 million loans we did and a 26% increase year-on-year and added 2.3 million new customers during this period with 52% new to credit at par with previous years." — Rajeev Jain

Critical Insight: The 52% "new to credit" ratio during festive season represents a responsible balance between franchise expansion and deepening of existing customer relationships. This metric is important for assessing credit risk escalation from deepening into lower-income segments.

Customer Franchise Expansion:

"Customer franchise, a key driver of our growth momentum for future years, expanded to cross 110 million to end at 110.64 million. We added 4.13 million new customers in Q2 alone. We now expect to add 16 to 17 million new customers in FY '26." — Rajeev Jain

Customer Acquisition Implications:

Current franchise: 110.64 million customers
Full-year FY'26 expectation: 16-17 million new customer additions
Market share insight: "The franchise is very, very large. We are 13% of number of loans in India on a monthly basis, but we are only 4% of the balances." — Rajeev Jain

This 9 percentage-point gap between loan count share (13%) and balance sheet share (4%) is a critical competitive moat: it suggests significant headroom to deepen AUM per customer through cross-selling and product expansion without proportional credit risk escalation, provided underwriting discipline is maintained.

Segment-wise Growth Drivers:

"New lines of businesses, namely gold loans, new car loans, CV, tractor are growing in a healthy manner and contributed to 3% of overall AUM growth in Q2. MSME growth, which we have flagged in last quarter, moderated to 18% as part of our risk-first approach to ensure portfolio resilience and long-term sustainability." — Rajeev Jain

Notably:

MSME guidance downgrade: From expected healthy growth to 10-12% for full year (articulated below)
Captive 2W/3W rundown: "The captive 2-wheeler and 3-wheeler finance business is getting phased out as per the plan, strengthening overall asset quality trends from FY'27 onwards perspective. It now only contributes to 1.5% of overall AUM." — Rajeev Jain

This rundown of high-credit-cost captive financing is strategically positive, as it reduces drag on profitability metrics from FY'27 onwards.

1.3 MSME Business – Material Risk Adjustment

Severity of MSME Stress:

Management explicitly acknowledged incipient stress across the MSME portfolio and has taken decisive corrective action:

"MSME business remains under watch and company has taken significant risk actions. We have virtually cut MSME business by 25% in our unsecured MSME volumes. We now expect MSME business to grow in the current full fiscal by 10-12% only." — Rajeev Jain

Key Q&A Excerpt on MSME Restructuring:

When pressed on the acceleration of restructuring charges (INR 288 crores in Q2 vs. INR 150 crores expected), management stated:

"We're mostly done with restructuring, Abhijit. We're mostly done with restructuring. It is used as a tool to enable good customers to assist them. So in terms of restructuring that you will see over the next few quarters, our number will very, very low." — Rajeev Jain

And further:

"Just to reiterate the point, we are on top of it. We have taken corrective actions. We believe that the problem is manageable. We've also provided guidance in terms of growth, credit cost and so on and so forth. Nothing is alarming as such." — Sandeep Jain, Chief Operating Officer & Chief Financial Officer

MSME Stress Nature – Geographic vs. Systemic:

When asked if stress was regionally concentrated, management clarified:

"As we had outlined, we are seeing in last -- first quarter, we talked about it that we are seeing incipient stress. It's across the board. It's not regional in nature." — Rajeev Jain

This is a material disclosure: the stress is portfolio-wide (North to South, East to West), not attributable to localized weather or infrastructure issues. This suggests structural underwriting looseness in the MSME segment that required correction.

1.4 New & Emerging Business Lines – Strategic Expansion

Gold Loans – Standout Growth Engine

Portfolio Scale & Expansion Trajectory:

Management articulated an ambitious gold loans expansion plan:

"Let's say, if I was for a moment, leave aside, I would say -- I would bet that this portfolio could be between -- we'll end this year with around -- we are INR 12,000 crores. We'll end at around INR 16,000 odd crores, plus/minus. I -- and we are significantly -- we've just signed up a significant expansion in the business. It should be between INR 27,000 crores to INR 30,000 crores business by March '27." — Rajeev Jain

Profitability Validation:

A critical statement on profitability metrics:

"We are significantly -- we've just signed up a significant expansion in the business. It should be between INR 27,000 crores to INR 30,000 crores business by March '27. So we are raring to principally -- Sidhaant is supportive. Yes, so we have signed up. We are -- we think we're reasonably -- and when I say reasonably perfected the model, perfecting the model is not just about aggregating assets. We track leading competitors in this business and the ROEs they generate. We are generating very similar ROEs as they are generating in the business. To us, the metric is not just scale. Metric is the level of profitability because that is the purpose of building this business." — Rajeev Jain

NBFC Analyst Note: This statement is crucial. Management is not pursuing scale for scale's sake; they are benchmarking ROE against incumbents (primary players like Muthoot, Manappuram) and achieving parity. This suggests disciplined pricing and underwriting in a competitive market.

Branch Expansion & Operational Leverage:

"You will see from now till March '27, virtually 900 more branches coming through. You would see instead of 500 of our existing branches get converted into gold loan branches because there is a second order point. As FinAI gets deployed, branch branches will be rendered surplus, quite honestly. The staffing will become free to do other things rather than doing some of the work that they're doing today. It's a fact. It will happen in the next 15-18 months, which is connected to the point on FinAI that I was making to you. So 2 things are coming together. So a cost centre will become profit centre, look at it another way." — Rajeev Jain

This strategy of converting underutilized branch infrastructure into high-margin gold loan branches (leveraging FinAI to free up staff) is a clever operational leverage play and should drive material margin accretion from FY'27.

Gold Loan Resilience to Price Volatility:

Management addressed downside risk from gold price decline:

"Three scenarios, right? It goes up further, good. Remains flat, good. Goes down, we have seen in COVID, it went up to INR 55,000 per 10 grams and went down to INR 45,000, you land up doing fire sale." — Rajeev Jain

And offered mitigation:

"No, it's a good point… one of the key modes that we've developed is apart from generating efficiencies per branch, which technically one has benchmarked and learned, 40-45% of the business is coming from existing customers. Actually, coming digitally, 40-45% of the monthly disbursals that we do now, we do INR 1,700 crores to INR 1,800 crores disbursals a month are coming from the app. That's really where they're coming from. So it's a moat that we have created, which gives us high degree of confidence in being able to continue to sustain momentum." — Rajeev Jain

Key Takeaway: Digital customer stickiness (40-45% of disbursals from app; 75 million app customers; 45 million monthly active users) creates a durable competitive advantage against price-driven churn.

Tractor Financing – Disciplined Buildout

Management provided specific details on the nascent tractor financing business:

"Tractor, again, the book is very, very small. That's point one. Total book is INR 1,000 crores, so not material. But on a more important basis, we have -- as we started the business, we were very clear as to what the mix is to be. The mix is to be 75% new and 25% used. That's the mix, and that's a mix with which we are building out the business. So our portfolio modelling says that for us to deliver minimum hurdle rate of return on equity in the tractor finance business, we'll need a 75-25 mix, and that's really what we are going with." — Rajeev Jain

And on distribution:

"We are in 400 towns in India at this point in time. So -- and predominantly South and West… North and west, sorry, dominated." — Rajeev Jain

NBFC Analyst Perspective: The discipline here is evident—management has defined a minimum ROE hurdle and backed into required mix (75/25 new/used) to achieve it. This is disciplined capital allocation, not growth-at-all-costs.

2. PROFITABILITY & SPREADS

2.1 Net Interest Income (NII) & Net Interest Margin (NIM)

NIM Stability:

"NIM came in flat, in line with Q1." — Rajeev Jain

Cost of Funds Improvement & Pass-Through Strategy:

"Cost of funds continue to improve, improved by 27 basis points in Q2 and came in at 7.52%." — Rajeev Jain

Full-Year Guidance:

"For FY '26, we expect cost of funds to be in the region of overall full year to be between 7.5% to 7.55%." — Rajeev Jain

CRITICAL MARGIN MANAGEMENT INSIGHT:

Management has explicitly adopted a customer-centric rate pass-through strategy, choosing not to expand NIM despite cost of funds improvement:

"I would love to have that, Viral. But I think the best assumption that we have at this point in time suggests that we will rather hold the NIM at the current level. Idea is to pass on the incremental benefit to customers. We have seen already 27 basis point improvement, and we have passed on the entire benefit to the customers even in the current quarter, and that's a result, NIM came in flat versus Q1." — Sandeep Jain

"Idea would be that work with improving the overall cost of fund environment as far as Bajaj Finance is concerned and use that opportunity to pass on the benefit to the customers and maintain the NIM at current level." — Sandeep Jain

Strategic Implication: This approach prioritizes market share and customer loyalty over near-term profitability expansion. While it limits NIM accretion in FY'26, it should support AUM growth momentum and customer franchise deepening. However, it also suggests management expects a competitive lending environment where pricing power is limited.

Future Rate Cut Benefits:

When queried on potential RBI rate cuts:

"Yes. We are not privy to any further rate cut that is being discussed or has been announced formally or informally. So we have taken only 100 basis points. Having said so, even if there's a rate cut either in December or February, given that it will be too close to the year-end, it won't have any material impact on the cost of funds for us as an organization. So you can assume that even with that, the 755 to 760 guardrail probably will remain same only." — Sandeep Jain

"Benefit will flow in next year, not in the current year." — Rajeev Jain

Key Takeaway: Any further rate cuts will benefit FY'27 (not FY'26), and management is assuming only 100 bps cumulative cuts (likely ~75 bps already realized plus ~25 bps expected). This is conservative relative to market expectations of potential 50-100 bps further easing in H2 FY'26.

2.2 Return Metrics – ROA & ROE Stability

"ROA and ROE remained steady." — Rajeev Jain

While verbatim figures are not provided in the transcript for Q2 ROA/ROE, management's statement of "steady" performance suggests these metrics remained resilient despite:

Elevated credit costs in Q2 (2.05% loan loss to average AUM)
Significant provisioning in MSME segment
Flat NIM

This stability, combined with solid AUM growth (24%), indicates operational earnings momentum is offsetting credit cost headwinds.

Subsidiary ROA Highlights:

BHFL: "They still delivered a PAT growth of 18% and ROA of 2.3%." — Rajeev Jain
BFSL: "saw 40% growth in AUM and profits were up by 27%." — Rajeev Jain

2.3 Operating Efficiency – OpEx to NII Trend

Q2 Efficiency Improvement:

"Opex to NTI improved to 32.6% as against 33.2% in Q2 last year." — Rajeev Jain

Incremental 60 bps of operating leverage delivered YoY, despite inflationary wage pressures and AI/FinAI investment.

Forward Efficiency Outlook – FinAI Impact:

"AI implementation across each line of business continues to move forward and should start to reflect in cost and productivity benefits over the next 12-18 months. In general, we remain very, very excited about the FinAI transformation." — Rajeev Jain

Management is investing in FinAI now (consuming cost), with benefits expected to materialize in H2 FY'27 onwards. This suggests OpEx/NII could face near-term pressure in H2 FY'26 as FinAI rollout accelerates, but should then decline sharply in FY'27-28.

3. ASSET QUALITY & CREDIT RISK

3.1 Stage 3 (Gross & Net) – Deterioration Drivers

Gross NPAs (Stage 3):

"GNPA and NNPA came in at 124 basis points and 60 basis points." — Rajeev Jain

Sequential Change Context:

Management provided important technical context on Q1-to-Q2 seasonal deterioration:

"On a first quarter to second quarter, the number goes up or moves up sequentially because of number of -- a high number of days between Q1 and Q2." — Rajeev Jain

"So the number moves anywhere between 15 to 18 basis points… 18 to 20 basis points as Sandeep is correcting me, which is really how it is for the last 2-3 years, if you look at the trends." — Rajeev Jain

This is crucial context: approximately 18-20 bps of the sequential GNPA increase is attributable to calendar effects (231 days in Q2 vs. 92 days in Q1, pushing borderline 88-89 DPD accounts into 90+ DPD Stage 3 status).

Year-on-Year Deterioration (1.06% to 1.24% = 18 bps):

Breaking down the YoY increase:

"Last year same time was 1.06% of GNPA. Currently, it's at 1.24%. Out of this 18 basis points, the captive 2-wheeler 3-wheeler financing business, which is on rundown mode, contributes to about 12 basis points of additional GNPA formation. And the MSME, which is what we called out in Q1 as well, has contribution of another 6 basis points. So these are the 2 business to call out. Other than that, all other businesses have held their performance on a Y-o-Y basis and sequential quarter basis as well." — Sandeep Jain

Attribution of YoY GNPA Increase:

Business Segment	Contribution (bps)
Captive 2W/3W (rundown)	~12
MSME	~6
Other businesses	~0
Total YoY Increase	~18

This is encouraging: core businesses (excluding intentional rundown and MSME) have held GNPA steady YoY, indicating the stress is localized and manageable.

3.2 Net NPA (Stage 2 & 3 Combined – Provisions Impact)

"NNPA came in at 60 basis points." — Rajeev Jain

The 64 bps gap between GNPA (124 bps) and NNPA (60 bps) reflects provisioning coverage ratio of approximately 51.6% (60/124), indicating moderate loss absorption.

3.3 Credit Losses – Loan Loss to Average AUM

"Loan loss to average AUF came in at 2.05% compared to 2.02% in Q1 from a sequential standpoint." — Rajeev Jain

Q2 Credit Costs Elevated but With Encouraging Trends:

"Credit costs principally remained elevated in Q2. However, the good news is that the vintage metrics when we look at the portfolio across 3 MOB, 6 MOB, 9 MOB are showing significant improvement." — Rajeev Jain

This is the most important data point: While current-quarter stress (reflected in Q2 losses at 205 bps) remains elevated, forward-looking vintage cohorts show improvement, suggesting the worst of MSME stress has been captured and credit costs will normalize.

3.4 Full-Year FY'26 Credit Cost Guidance

"As a result, we expect full year credit cost to come within 1.85% to 1.95% for FY'26, and we expect significant improvements in credit costs for FY'27." — Rajeev Jain

Verbatim Guidance Floor: "We expect full year credit cost to be at the upper end of guided range of 1.85% to 1.95% now." — Rajeev Jain (opening remarks)

Interpretation: Management is guiding toward the upper end of 1.85%-1.95% range (i.e., ~1.93-1.95%) for full-year FY'26. This reflects:

Q1 & Q2 elevated losses already booked
Expectation that H2 losses will decline from H1 levels (due to vintage stabilization and MSME volume reduction)
Expectation that the full-year blended rate lands near the upper guidance band

3.5 Captive 2W/3W Finance – The High-Loss Segment

Disproportionate Loss Concentration:

"The captive 2- and 3-wheeler business continues to -- which contributes to 1.5% of AUM, but accounts for 9% of the overall loan loss also continues to run down." — Rajeev Jain

Loan Loss Intensity: This implies a credit loss rate of approximately 600 bps (9% ÷ 1.5%) on captive 2W/3W business, versus ~205 bps blended (INR 2,200 crores losses on estimated INR 1.07 lakh crores AUM).

This is an extreme-tail loss segment. The rundown is strategically important:

"That should also lead to significant improvement in loan loss to average AUM metric in second half of the year and also in FY'27." — Rajeev Jain

Positional Change:

Current contribution: 1.5% of AUM, 9% of losses
Post-rundown (FY'27): Near-zero contribution to losses (tailwind to credit costs)

3.6 Improved Management Assessments – Rural B2C & MFI

"On portfolio credit quality, the management assessment for rural B2C and MFI has been improved from yellow to green, as you can see it in the numbers itself in the portfolio quality panel." — Rajeev Jain

And in the Q&A:

"And talking about rural B2C, after a long time, we have now revised the management assessment from yellow that it was tagged for close to about 2 years to green. We are reasonably confident with the kind of change management that we have done in the business, the granularity with which we are building the rural B2C business and the significant improvement that we have seen in the vintage performance in the last couple of quarters. We are quite excited to rebuild the business and grow it faster." — Sandeep Jain

Strategic Implication: This upgrade is significant. Rural B2C was a drag on risk appetite. The upgrade to green signals management confidence in portfolio stabilization and positions this segment for accelerated growth contribution in FY'27+.

3.7 Stage 2 & Stage 3 Formation – Stabilization Signal

"The overall formation of stage 2 and stage 3 put together was just about INR 162 crores for the quarter, one of the lowest that we have seen in a very, very long time." — Sandeep Jain

This is a powerful data point: new stress formation is at historical lows, indicating:

Customer base is stabilizing
Underwriting tightening in MSME/other segments is working
Near-term stress inflows are drying up

4. LIABILITY MANAGEMENT & CAPITAL STRUCTURE

4.1 Cost of Funds – Improving Trajectory

Q2 Achievement:

"Cost of funds continue to improve, improved by 27 basis points in Q2 and came in at 7.52%." — Rajeev Jain

FY'26 Full-Year Guidance:

"For FY '26, we expect cost of funds to be in the region of overall full year to be between 7.5% to 7.55%." — Rajeev Jain

Implied Path: If Q2 CoF is 7.52% and full-year guidance is 7.50%-7.55%, this suggests Q3-Q4 CoF will average ~7.48%-7.50% (slightly better than Q2). This reflects:

Declining funding costs in market (RBI rate cuts)
Potential improvement in deposit mix & pricing efficiency

4.2 Deposit Book – Measured Growth Strategy

"Deposit book, which contributes to 18% of the overall consolidated borrowing grew by 5% year-on-year." — Rajeev Jain

Strategic Stance on Deposit Growth:

"For FY '26, in general, as you saw in the trends in Q1 as well, the company has adopted a measured stance on its deposit program with higher focus on delivering cost of funds efficiencies to the businesses." — Rajeev Jain

Deposits as % of Funding:

Current: 18% of consolidated borrowings
Implication: 82% sourced from borrowings (banks, market borrowings, securitizations, HFCs, etc.)

A 18% deposit contribution is relatively low for an NBFC. This suggests:

Liquidity Risk Profile: Bajaj is less dependent on stable deposit franchises vs. liability-dependent NBFCs (e.g., Shriram Finance, Cholamandalam). This is both positive (less wholesale rate sensitivity) and negative (greater market funding dependency).
ALM Risk: With 82% market-sourced funding, duration mismatches could be material if liabilities shorten relative to asset maturity.

Management has specifically stated they will continue a measured approach to deposit growth, prioritizing cost efficiency over rapid deposit accumulation. This suggests they are comfortable with the current 18% mix and market funding dependency.

4.3 Capital Adequacy & Growth Headroom

The transcript does not provide explicit CAR guidance. However:

Consistent profitability (ROE/ROA steady despite credit costs)
Conservative guidance (22-23% AUM growth, not aggressive)
MSME volume cuts (capital preservation)

These actions suggest management is conscious of capital efficiency and unlikely to be CAR-constrained, but specific CAR data is absent.

5. FINAI TRANSFORMATION – STRATEGIC LEVER

Management articulated extensive FinAI investments and early outcomes. This is critical for understanding future cost trajectory and competitive positioning.

5.1 Implementation Status

"We are 8th-9th month into implementation of FinAI transformation for us as a firm. It remains central to our long-term vision, and we are on track to become a future-ready AI financial services company over the next, I would say, 15-18 months." — Rajeev Jain

Scope & Intensity:

"We, as senior management are now spending virtually over the last 8-9 months, 12-15% of our time on FinAI transformation. We have identified as a firm as part of our BPR process, 123 impact areas -- high-impact areas across business and functions with 80 of them, which will plan to go live by end of Feb '26." — Rajeev Jain

Implication: 80 of 123 high-impact areas going live by Feb '26 means H2 FY'26 will be heavy on FinAI rollout, likely consuming cost. Benefits (OpEx reduction, productivity gain) will materialize in H2 FY'27 onwards.

5.2 Live Capabilities & Early Wins

AI Voice Bots

"442 AI voice bots are now live. They contributed INR 2,000 crores of origination in Q2 alone." — Rajeev Jain

Implication: AI is directly contributing to originations (not just back-office efficiency), suggesting high customer satisfaction and conversion capability.

Conversational & Text Bots

"Its 5 AI conversational bots, text bots are live for EMI card, extended warranty, personal loans, health insurance and life insurance. The conversion rates in general are quite encouraging." — Rajeev Jain

Customer Service Resolution

"85% of customer service resolutions in Q2 was resolved via AI-powered service bots." — Rajeev Jain

Implication: This is an exceptionally high rate of AI resolution and suggests significant cost savings on customer service headcount.

B2B Quality Checks

"In B2B, where we moved a lot of volume in these 40 days, 42% of loan applications in terms of quality checks was performed by AI. We booked in the process 6.5 lakh loan applications in a single day with zero compromise on operational and compliance risk." — Rajeev Jain

Note: The 42% AI quality check rate is expected to reach

Bajaj Finance Ltd — Dec2025 Conference Call Summary