According to reports from The Financial Express, Bajaj Housing Finance opened at ₹150 on its September 2024 listing, representing a 114% premium over its IPO price of ₹70. The stock reached a third-day high of ₹188.45 but has since fallen 55% to its current price of ₹84.75. This decline occurred amid broader market weakness, with Sensex falling 188 points and Nifty declining 36 points on Thursday. The stock's one-year return stands at negative 24.67% and year-to-date return is negative 11.83%, reflecting the challenging market conditions affecting housing finance stocks.
As reported by The Financial Express, the company has demonstrated consistent growth across key metrics. Revenue has grown at 25.3% compounded annually over three years, while profit has grown at 26.9% during the same period. Three-year EPS growth stands at 18.1%, indicating strong operational performance. The company's financing margin has remained stable at around 29-31% in recent years, showing resilience in the underlying financing business. AUM reached ₹1.50 lakh crore in Q1 FY27, up 24% year-on-year, while quarterly disbursements rose 33% to ₹19,509 crore.
According to The Financial Express, the company maintains exceptionally strong asset quality metrics. Gross NPA stands at 0.29% and Net NPA at 0.12% in Q1 FY27. The company has shown consistent improvement in asset quality, with gross NPA peaking at 0.30% in Q1 FY26 before improving to 0.26-0.27% in subsequent quarters. ROE of 12.1% and a three-year average of 13.3% are respectable but not yet high enough to justify the premium valuation. Management expects FY27 ROE in the 12-13% range.
As reported by The Financial Express, at ₹84.75, the stock trades at a P/E of 26.1x against an industry P/E of 13.5x, while price to book stands at 3.14x against an industry PBV of 1.82x. This means the stock remains expensive relative to the broader housing-finance sector despite having corrected sharply from its peak. Promoter ownership remains high at 86.7% with no pledged shares, though this also means compliance with minimum public-shareholding requirements could result in periodic stake sales.
According to The Financial Express, the biggest risk is margin compression with management expecting NIM to moderate by 20-25 basis points in FY27 due to competitive intensity and replacement of higher-yielding legacy loans with lower-yielding new loans. The second risk is that strong balance-sheet growth may not immediately translate into proportionately higher returns. The company maintains a liquidity buffer of ₹2,516 crore and LCR of 158% at June 2026, well above the 100% regulatory requirement. The investment case now centers on whether the company can sustain 20%+ AUM growth, preserve exceptional asset quality, and gradually improve ROE while navigating margin pressure.
