BAJAJHFL - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

🧠 How I’m Thinking About This

You’re asking for a full-spectrum fundamental analysis of Bajaj Housing Finance Ltd (BAJAJHFL). I’m evaluating its financial strength, valuation metrics, business model, and technical indicators to determine its long-term investment potential and ideal entry point.

📊 Core Financials Breakdown

Profitability & Growth

EPS: ₹2.72 — modest given the market cap

PAT Qtr: ₹583 Cr vs ₹587 Cr — stable performance

ROE: 13.5%, ROCE: 9.55% — decent but not exceptional

Qtr Profit Var: +20.9% — solid growth momentum

Balance Sheet Strength

Debt-to-equity: 4.11 — high, but typical for housing finance companies

Book Value: ₹24.0 — price-to-book ratio ~4.79, indicates premium valuation

Dividend Yield: 0.00% — reinvestment-focused

💰 Valuation Indicators

Metric Value Interpretation

P/E Ratio 42.2 Overvalued vs industry PE of 19.9

P/B Ratio ~4.79 Premium to book value

PEG Ratio 0.94 Fair — valuation aligns with growth

Intrinsic Value ~₹105–₹110 Slightly overvalued at current price

Valuation is elevated, but PEG suggests it’s not irrational given the growth trajectory.

🏦 Business Model & Competitive Edge

Industry: Housing finance — long-term growth driven by urbanization and home ownership

Moat: Backed by Bajaj group, strong underwriting standards, digital lending infrastructure

Challenges

High leverage

Low dividend payout

Slight decline in institutional holding

Despite modest EPS, the company benefits from strong brand equity and a growing housing finance market.

📉 Technical & Entry Zone

Current Price: ₹115

DMA 50/200: Trading near both — neutral trend

MACD: -0.07 — flat momentum

RSI: 55.1 — neutral zone

📌 Suggested Entry Zone: ₹105–₹110

This range offers a better margin of safety and aligns with intrinsic value estimates.

🕰️ Long-Term Holding Guidance

Hold if already invested — stable fundamentals and growth potential

Buy on dips near ₹110 if bullish on housing finance

2026 Target Price: ₹135–₹145 based on projected earnings and sector expansion

⭐ Fundamental Rating

3.9

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