Shares of Bajaj Housing Finance, a stock that generated significant excitement following its September 2024 IPO and subsequent multibagger rally, have experienced a dramatic 53% decline from their peak. This sharp correction has led to mixed reactions among market analysts regarding its future prospects and whether the current valuation presents a buying opportunity.
From IPO Highs to Current Valuations
Bajaj Housing Finance initially raised Rs 6,560 crore through its maiden public offering, with shares priced at Rs 70 apiece. Following its listing, the stock surged by nearly 160%, reaching a high of Rs 181.50. However, the counter has since retreated significantly, currently trading around Rs 86.03, which is 53% below its peak and just 23% above its original IPO price.
Q1 FY27 Performance Overview
Despite the share price volatility, Bajaj Housing Finance reported a robust financial performance for the June 2026 quarter (Q1 FY27). The company's net profit saw a 22% year-on-year (YoY) increase, reaching Rs 715.28 crore. Total revenue grew by 17.10% YoY to Rs 3,063.02 crore, with interest income also rising by 17.5% YoY to Rs 2,856.07 crore.
Key operational highlights for the quarter include:
- Assets Under Management (AUM): Expanded by 24.24% YoY to Rs 1,49,610 crore.
- Disbursements: Recorded its highest-ever quarterly disbursement at Rs 19,509 crore, an 11.39% increase YoY.
- Asset Quality: Remained stable, with Gross Non-Performing Assets (NPAs) improving to 0.29%, while Net NPAs also held steady.
Analyst Ratings and Target Prices
Brokerage firms have offered a range of recommendations on Bajaj Housing Finance, reflecting the divided expert opinion:
'Buy' Ratings
- ICICI Securities: Issued a 'buy' rating with a target price of Rs 125. The firm noted a steady Q1 FY27 performance, stable Return on Assets (RoA) at 2.3%, and Return on Equity (RoE) expansion to 12.5%. While acknowledging intensified competition pressuring Net Interest Margins (NIMs), lower credit costs supported earnings.
- Phillip Capital: Also holds a 'buy' rating with a target price of Rs 110.
'Add' Ratings
- JM Financial: Recommended an 'add' rating with a target price of Rs 95. They anticipate a 20% EPS CAGR over FY26–28E, driven by improved operating efficiency and contained credit costs, though current valuations may limit immediate upside.
- Kotak Institutional Equities: Target Price: Rs 100
- Emkay Global: Target Price: Rs 90
- IIFL Securities: Target Price: Rs 90
- Axis Capital: Target Price: Rs 100
'Neutral' Ratings
- UBS: Target Price: Rs 100
- Motilal Oswal: Target Price: Rs 95
- JP Morgan: Target Price: Rs 85
'Reduce' and 'Sell' Ratings
- HSBC: Has a 'reduce' rating with a target price of Rs 76.
- DAM Capital: Issued a 'sell' tag with a target price of Rs 80.
- Ambit: Also has a 'sell' tag with a target price of Rs 83.
Despite management's optimism for maintaining RoA and AUM growth, ICICI Securities highlighted potential further NIM compression due to incremental yields being lower than the current book yield. The consensus indicates that while the company's operational performance remains strong, intense competition and valuation concerns are key factors influencing analyst recommendations.