Whalesbook
Bajaj Housing Finance's Q4 FY26 results show significant operational expansion. Gross disbursements climbed 23% year-over-year to ₹17,530 crore, and assets under management (AUM) grew 23% to ₹1.4 lakh crore as of March 31, 2026. The company's loan book expanded to approximately ₹1.23 lakh crore. This growth in lending activity signals strong demand for its housing finance products.
However, despite these positive operational metrics, the company's stock has been on a sharp downtrend. Shares are currently trading around ₹78, a significant fall from its September 2024 post-listing high of ₹188.50 and only 10% above its IPO price of ₹70. The stock saw a nearly 15% decline in March 2026, contributing to an 18.7% year-to-date drop.
This market reaction highlights a disconnect between Bajaj Housing Finance's operational performance and its stock valuation. Its price-to-earnings (P/E) ratio stands at about 26.2x, considerably higher than peers like LIC Housing Finance (around 4.8x) and HDFC Bank (around 15.7x). This premium valuation was established during its September 2024 IPO, where it debuted at a 114% premium. However, current market conditions and the stock's performance suggest investors are re-evaluating this multiple.
Broader industry challenges also impact Bajaj Housing Finance. The Indian housing finance sector, while projected to grow, faces evolving dynamics. Housing sales across India's top cities moderated in Q1 2026, declining 13% year-on-year. This slowdown, linked to supply constraints and uncertainties, could affect demand for loans. Analysts have initiated coverage with caution. While JM Financial gave an 'Add' rating with a ₹88 target price, they noted the rich valuation limits near-term upside. Other reports cite average price targets around ₹100, but some brokers remain wary of current multiples. Although Bajaj Housing Finance has historically maintained low levels of bad loans (NPAs), a general market slowdown or increased competition could pressure future profitability. The absence of dividend payments may also deter some investors.
Looking ahead, Bajaj Housing Finance is positioned within a growing Indian housing finance market, supported by its parent company, Bajaj Finance. Analysts forecast Earnings Per Share (EPS) to grow at a Compound Annual Growth Rate (CAGR) of 20% from FY26 to FY28, with projected returns on assets around 2% and return on equity of 13-14%. Despite these growth projections, analyst price targets vary widely, from ₹146 to over ₹340, reflecting significant uncertainty about future stock performance. Sustaining its growth trajectory while navigating market skepticism and sector-wide moderation will be crucial for the company.