Bajaj Finance Gold Loan: Bajaj Finance’s Q4FY26 performance has brought an unexpected standout into focus, its gold loan business. While the company reported a steady 22 per cent year-on-year rise in net profit to Rs 5,553 crore, it was the sharp acceleration in gold-backed lending that came into spotlight as the segment recorded a 115 per cent jump in assets under management (AUM) to Rs 17,831 crore, with its contribution to the overall loan book rose meaningfully from 2 per cent a year ago to 3.5 per cent at the end of March 2026.
The company has been aggressively expanding its physical footprint to tap into the growing demand for gold loans. During the quarter alone, Bajaj Finance added 138 new gold loan branches, taking the total count to 1,507 branches, a sharp rise from just over 900 a few quarters ago. This rapid scale-up reflects a conscious push to build a deeper presence in semi-urban and rural markets, where gold loans remain a preferred form of credit. At the same time, the microfinance network remained relatively stable, underlining where the company’s immediate priorities lie.
What makes this expansion particularly timely is the broader backdrop of elevated gold prices. Even after some correction from recent peaks, gold continues to trade at historically high levels, keeping loan demand buoyant. Higher gold prices allow borrowers to unlock more value against the same collateral, while also reducing risk for lenders due to stronger recovery prospects.
According to Nirmal Bang, the segment has emerged as the “standout growth driver,” with expectations that it could contribute around 5 per cent of total AUM by FY27, up from current levels.
However, this growth has come with a modest increase in operating costs. The company reported operating expenses at 33.8 per cent of net total income, slightly higher than the previous year. Management attributed this to the dual impact of regulatory changes under new labour codes and the rapid rollout of gold loan branches.
After a sharp, record-setting rally that pushed gold prices to around USD 5,595 per ounce in late January, the metal has since corrected by nearly 11 per cent, as geopolitical tensions, particularly the US and Israel’s strikes on Iran, triggered a rush among investors to raise liquidity. Currently, gold is trading near USD 4,554.89 per ounce, indicating some cooling from peak levels but still holding relatively firm.
Despite the recent pullback, the broader outlook for gold remains strong. According to a Reuters poll, gold is expected to average around USD 4,916 per troy ounce in 2026, marking the highest annual forecast since the survey began in 2012. This projection is notably higher than the USD 4,746.50 estimate from three months ago, reflecting continued optimism around bullion amid global uncertainty and macroeconomic shifts.
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)