Bajaj Housing Finance reported an 18% year-on-year profit growth to ₹760 crore in the second quarter of fiscal 2027. While asset growth remains robust at 25%, brokerage firm Motilal Oswal has maintained a neutral stance, noting that the stock's current valuation already accounts for expected medium-term growth.
Bajaj Housing Finance reported a profit after tax of ₹760 crore for the second quarter of the 2026-27 fiscal year, marking an 18% increase compared to the same period last year. The lender's net interest income, which is the difference between interest earned from loans and interest paid on deposits, grew by 10% to ₹1,055 crore.
The company’s assets under management expanded by 25% year-on-year, reaching ₹1.6 trillion. This growth was supported by new loan disbursals of ₹199 crore during the quarter. A key driver for this expansion has been the 'Sambhav' product, which targets the affordable housing segment. This category has surpassed a monthly disbursement rate of ₹500 crore, contributing to roughly 16% of total home loan originations in the quarter. This indicates a strategic shift by the company to capture demand in the lower-ticket size housing market, which often carries different risk profiles than premium lending.
From an operational efficiency perspective, the company managed its costs effectively, with operating expenses rising by 12% to ₹240 crore. The pre-provision operating profit, a measure of core earnings before accounting for bad loan provisions, grew by 15% to reach ₹1,010 crore. Asset quality remains a critical metric for housing finance companies, and in this quarter, credit costs were reported at approximately 10 basis points on an annualized basis. This low figure suggests that the company’s underwriting standards remain conservative, helping to keep losses manageable despite the growth in loan volume.
Brokerage firm Motilal Oswal has maintained a neutral rating on the stock, setting a price target of ₹95. The analysis suggests that the current valuation, trading at 2.4 times the estimated book value for the 2028 fiscal year, largely prices in the company's growth potential for the medium term. In financial terms, a price-to-book ratio is often used to assess whether a stock is expensive relative to the value of its assets; a higher multiple implies that investors are paying a premium today for expected future earnings growth.
The housing finance sector in India remains highly competitive, with both banks and specialized housing finance companies vying for market share. For investors, the primary monitorable in coming quarters will be the company’s ability to maintain these loan disbursement levels while keeping asset quality stable. The sustainability of the 'Sambhav' loan category's performance and the company’s ability to manage margins amid potential interest rate fluctuations will also be important areas to track.