Healthy credit cycle set to keep NBFCs on growth track in Q1

Analysts expect NBFCs to post around 20% year-on-year AUM growth in Q1FY26, led by affordable housing, microfinance recovery and steady commercial vehicle financing. Bajaj Finance reported 24% YoY AUM growth to about Rs 5.46 lakh crore, while L&T Finance's retail loan book expanded 28% to Rs 1.27 lakh crore. Falling bond yields to 6.72% from 7.12% are seen as positive for NBFCs' cost of funds, though gold loan companies may face pressure from competition and a 30% fall in gold prices from January peak.