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Bajaj Finance Anticipates Slower Growth in Key Sectors

Leading Indian non-banking financial company (NBFC) Bajaj Finance has signaled a more tempered outlook for its two & three-wheeler (2&3W) and Micro, Small & Medium Enterprises (MSME) businesses in the fiscal year 2026 (FY26). This comes as the company navigates a changing economic landscape and evolving market dynamics.

Managing Director Rajeev Jain recently shared these expectations, reflecting a strategic assessment of the current situation. While Bajaj Finance remains committed to these crucial segments, the company acknowledges potential headwinds that could impact growth rates.

2&3-Wheeler Finance AUM Declines

Recent financial results highlight a noticeable shift in the 2&3-wheeler finance portfolio. The Assets Under Management (AUM) in this sector experienced a significant decline of 20% year-on-year for the April-June quarter. Specifically, the AUM dropped from Rs 19,689 crore in the same period last year to Rs 15,703 crore. This contraction underscores the challenges facing the 2&3-wheeler industry, potentially influenced by factors such as rising fuel costs, stricter emission norms, and a shift towards electric vehicles.

MSME Sector Considerations

The MSME sector, another cornerstone of Bajaj Finance's business, is also expected to face a period of moderated growth. While MSMEs remain a vital engine of the Indian economy, they are susceptible to economic fluctuations and credit availability. Factors like inflation, raw material price volatility, and access to financing can impact their operational performance and expansion plans. Bajaj Finance is closely monitoring these trends and adapting its strategies to support the MSME community effectively.

Strategic Response & Outlook

Despite these challenges, Bajaj Finance maintains a robust financial position and a strong track record of resilience. The company is actively exploring opportunities to diversify its portfolio, enhance risk management practices, and leverage technology to improve operational efficiency. They are also focusing on deepening their relationships with existing customers and expanding their reach to underserved markets.

Rajeev Jain's commentary suggests a proactive approach to navigating the evolving market conditions. The company is prioritizing sustainable growth and maintaining asset quality, even if it means a more measured pace in the near term. Investors and stakeholders can expect Bajaj Finance to remain a key player in the Indian financial landscape, adapting to challenges and capitalizing on emerging opportunities.

Key Takeaways

• Bajaj Finance anticipates slower growth in 2&3W and MSME sectors in FY26.
• 2&3-Wheeler Finance AUM declined by 20% year-on-year in Q1 FY25.
• Company is focusing on diversification, risk management, and technology adoption.