BAJAJHFL - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 20 Dec 25, 11:14 pm

Fundamental Rating: 3.5

📊 Financials: Bajaj Housing Finance Limited (BAJAJHFL) shows moderate fundamentals with ROE at 13.5% and ROCE at 9.55%, reflecting average capital efficiency. EPS is ₹2.83, supported by steady profitability. Debt-to-equity ratio of 4.44 is high, typical for housing finance companies, but adds leverage risk. Quarterly PAT improved from ₹583 Cr. to ₹643 Cr., showing healthy earnings growth (+17.8% QoQ).

💹 Valuation: Current P/E of 33.5 is significantly higher than the industry average of 18.0, suggesting premium valuation. P/B ratio (~3.75) is elevated compared to book value of ₹25.4. PEG ratio of 0.75 indicates reasonable growth prospects relative to valuation. Intrinsic value appears lower than current price, limiting margin of safety.

🏦 Business Model: BAJAJHFL operates in housing finance, focusing on retail mortgages and affordable housing loans. Competitive advantage lies in strong brand backing from Bajaj Group, wide distribution, and customer trust. However, high leverage and exposure to interest rate cycles remain risks.

📈 Entry Zone: Attractive accumulation zone is around ₹90–₹95 (near support and below DMA 50 & 200). Current price ₹95.3 is below both DMA 50 and DMA 200, indicating bearish momentum. RSI at 26.0 suggests oversold conditions, while MACD (-3.23) signals weakness.

🕰️ Long-Term Guidance: BAJAJHFL is a fundamentally stable housing finance company with strong brand support. However, valuations are stretched, and leverage is high. Best strategy is cautious accumulation near support levels and holding for long-term compounding, while monitoring credit quality and interest rate trends.

Positive

• ROE (13.5%) and ROCE (9.55%) show moderate efficiency 💪
• Quarterly PAT growth from ₹583 Cr. to ₹643 Cr. 🚀
• Strong brand backing from Bajaj Group 📊

Limitation

• High P/E (33.5) compared to industry average ⚠️
• Debt-to-equity ratio of 4.44 indicates high leverage 📉
• Dividend yield at 0.00% offers no income return 💵

Company Negative News

• FII holdings decreased (-0.13%), showing reduced foreign investor confidence 📉
• DII holdings decreased (-0.05%), reflecting weaker domestic institutional support ⚠️

Company Positive News

• Quarterly PAT growth (+17.8% QoQ) highlights strong earnings momentum 🚀

Industry

• Housing finance sector benefits from rising demand for mortgages and affordable housing 🏦
• Industry P/E at 18.0 indicates moderate valuation compared to BAJAJHFL’s premium 📊

Conclusion

⚖️ BAJAJHFL is a housing finance company with strong brand support and improving profitability. However, high leverage and stretched valuations limit margin of safety. Best strategy is cautious accumulation near ₹90–₹95 and holding for long-term growth, while monitoring credit quality and interest rate risks.