India’s Bajaj Housing Finance reported on Thursday its slowest quarterly profit growth since listing in September 2024, as heightened competition in the premium housing loan segment weighed on earnings.
The country’s biggest home loan financier by market value reported an 18% rise in second-quarter profit to 6.43 billion rupees for the three months ended September 30.
The premium housing segment is seeing stiff competition as banks have been offering home loans at much lower rates than non-banking finance companies (NBFC), such as Bajaj Housing Finance, in the last few months.
Unable to match that pricing without hurting profitability, several large finance companies are scaling back such lending, analysts said.
“Continued hyper competitive intensity in the prime home loans segment resulted in higher portfolio attrition,” Bajaj Housing Finance said.
In July, the company had forecast a moderation in growth, expecting assets under management to grow 21%-23% for the current financial year, compared to 26% last fiscal, hurt by rising competition and subdued demand.
Its loan assets rose 26% year-on-year to 1.13 trillion rupees for the quarter ended September 30, while its assets under management climbed 24% to 1.27 trillion rupees.
Net interest income, the difference between interest earned and paid, rose 34% to 9.56 billion rupees.
Asset quality improved with gross bad loans as a percentage of total loans falling to 0.26% at the end of September, from 0.30% three months earlier and 0.29% in the same period a year ago.
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