BAJAJHFL - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 3.2

Here’s a detailed diagnostic of BAJAJHFL—this one’s a bit of a mixed bag with plenty to unpack 🧠📉

💼 Core Financials Overview

Profit Trend

Qtr PAT is flat (₹583 Cr. vs ₹587 Cr.), with a respectable 20.9% quarterly variation.

EPS of ₹2.72 suggests modest earnings per share in light of its current price.

Return Metrics

ROCE: 9.55% and ROE: 13.5% — decent, but lower than ideal for financial sector leaders.

Could indicate limited capital efficiency compared to top-tier NBFCs.

Leverage & Cash Flow

Debt to Equity at 4.11: 🚨 very high leverage, common for financing businesses but still calls for caution.

No direct cash flow details, but debt level implies tight operational liquidity or aggressive expansion.

💰 Valuation Breakdown

Metric Value Interpretation

P/E Ratio 41.5 High relative to industry PE of 20.2

P/B Ratio ~4.70 Suggests optimistic pricing

PEG Ratio 0.92 Near ideal (<1), indicating growth at reasonable pricing

Dividend Yield 0.00% No yield—purely growth-oriented play

Intrinsic Value Implied ~₹85–₹95 Overvalued relative to fundamentals

Despite some valuation signals leaning favorable (PEG), the high P/E and low EPS curb its attractiveness.

🧬 Business Model & Health

Bajaj Housing Finance operates in a highly competitive and regulated NBFC landscape.

High leverage hints at aggressive loan book growth—but also exposes it to credit cycle risks.

Lack of dividend shows reinvestment priority, but with limited ROE, the impact may not be very accretive.

📉 Technical Snapshot & Entry Zone

RSI at 28.0: indicates oversold territory, possibly nearing a technical bottom.

MACD negative + lower volume confirms bearish momentum.

Price below both DMA 50 (₹120) and DMA 200 (₹127) — technically weak setup.

🎯 Entry Recommendation

Accumulate only below ₹105, preferably around ₹95–₹100

Short-term bounce possible from RSI levels, but no confirmation yet.

🕰️ Long-Term View & Strategy

Given high leverage, limited return metrics, and zero dividend

⚠️ Riskier long-term hold unless fundamentals improve.

🟡 May consider if EPS growth accelerates and debt is managed more conservatively.

🔴 Not ideal for conservative investors seeking stability or income.

Let me know if you'd like a peer scan across top-performing NBFCs like HDFC Ltd or LIC Housing Finance—I'll line them up for comparison 📋

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