India’s non-banking financial companies (NBFCs) are expected to deliver a mixed performance in the July–September quarter of FY26 (Q2FY26). The second half of FY26 could see better traction aided by GST cuts, improving demand, and volume recovery.

Second quarter business updates of retail-focused players such as Bajaj Finance and L&T Finance showed strong year-on-year growth in assets under management (AUM). In contrast, Mahindra & Mahindra Finance showed some weakness, with AUM rising by around 13% during the same period.

Overall growth in the quarter is likely to remain subdued for most players, though disbursement activity may see a gradual recovery. Asset quality pressures could persist, but some support may come from margin expansion.

The MSME and microfinance (MFI) segments ma

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