Bajaj Housing Finance Share Price Target

Being able to invest and come up with strategies that will enable you to win in the market involves some mental prowess and knowledge regarding the companies you are investing in. I would like to focus on one more stock which has attracted the growing interest of the financial markets and this is Bajaj Housing Finance Limited. One of the fastest-growing housing finance companies in India, Bajaj Housing Finance Limited is affiliated with one of India’s most trusted business groups, Bajaj Group.

In this blog, we will be doing a blog on Bajaj Housing Finance where we will be discussing their business model, a brief of their financials and a future analysis of them. It’s helpful for investors who would wish to invest in Bajaj Housing Finance shares with such information.

Background of the company: Bajaj Housing Finance Limited (BHFL)

Bajaj Housing Finance Limited was launched with the mission to provide affordable housing finance for customers within India. It is directly owned by Bajaj Finance Limited which is among the leading diversified financial groups in India.

BHFL works within the parameters of the National Housing Bank (NHB) policies and some of the company’s services include home loans, loans against property and construction finance. It is the endeavor of the company to offer convenient, efficient, and customer-oriented housing finance solutions for millions of aspiring homeowners in the country.

Key features and Services

There are variety of services available at Bajaj Housing finance in different fields which are:

1. Home Loans

One of the most popular products that the housing finance company offers is called Home Loan. Offers competitive and high interest rates to customers where the firm caters for the purchase or construction of the dream home through loans. Below are the loan programs offered by BHFL suited for the salaried employees, businessmen and the self employed;

Features:

Loan starts from ₹5 lakhs and can go up to ₹ 5 crores or more based on the value of the property.
Inter-bank interest rates, which are negotiable with fixed and the floating interest rates.
A long term lease up to 30 years to ensure EMIs of the project are sustainable.
Outsourcing’s most important advantage is, therefore, that it only requires simple documentation and a short approval cycle.
Special Housing loans to the existing home loan clients with less formalities

2. Loan Against Property (LAP)

Bajaj Housing Finance’s Loan Against Property (LAP) for the people who own property and in need of funds for business, personal or educational purposes. It also enables customers to get cash with the need of selling any of their property to finance their needs from financial institutions.

Features:

Large loan sum depending on the value of the property, with the maximum of up to ₹ 5 crore.
Reasonable and competitive interest rates together with flexible repayment period.
Looking at the typology of the loans offered by NBFCs the loans can be classified as:
Availability of the option of selecting between the residential and the commercial properties for the security purposes.

3. Balance Transfer Facility

BHFL provides a Home Loan Balance Transfer facility for those who have their home loan but trap in high interest rates of other financial institutions. This enables the borrowers to shift their existing home loan from one bank to Bajaj Housing Finance at a lower interest rate thus decreasing the EMI on the amount borrowed.

Features:

A reduction within the interest rate which may translate to highly respectable savings on EMIs.
A possibility to receive additional money for the transfer under a top-up loan agreement for the amount of registered transfer.
Effortless and easy procedures on balance transfer.

Housing for All by 2022 Campaign otherwise called Pradhan Mantri Awas Yojana (PMAY)

In order to ensure that the dream of housing for all is achieved, Bajaj Housing Finance Limited supports the government’s Pradhan Mantri Awas Yojana (PMAY). In this regard, potential borrowers can repay subsidies of the home loan interest so that more people can afford homes.

Features:

Putting interest rate subsidies in the same bracket as that of Credit Linked Subsidy Scheme (CLSS).
Affordable housing for the economically weaker section of the society, low-income groups, and the middle income groups.
Cutting down the overall cost of housing finance thus making housing more affordable.

Financial Performance of Bajaj Housing Finance

Since it is always advisable to invest in the stock of a company after evaluating its past performance, we take a look at Bajaj Housing Finance Limited’s financial summary below. It can be seen from the following figures that Bajaj Housing Finance has expanded its revenue and profitability streams steadily over the years.

Revenue Growth: It is generally accepted that the rates of increment in revenue are a strong sign of financial health of any company. Bajaj Housing Finance has emerged to do well because of increasing market uptake of housing finance and loans secured on properties. In the recent past, the Indian real estate sector has been growing tremendously, therefore more people are buying houses, and other business entities are in the process of seeking funds for the construction. It has further directly benefited BHFL in the process and much of the general growth from today’s scenario.
Profitability: However, that has not been a major issue since the company has been able to post respectable profit margins in its operations within this industry. This is mainly attributable to sound control over cost inputs and a lower cost of funds as compared with other forms of financing. Besides, secured lending particularly home loans and LAP the default rates are well controlled and this helps to protect the profitability of BHFL.
Asset Quality: It is an important factor in any lending institution This aspect is known as asset quality. Bajaj Housing Finance Limited has been in a good position with regard to asset quality having low NPAs. This performance has been specifically due to the stringent underwriting criteria as well as effective recovery procedures in the company.
Capital Adequacy: In terms of funds, BHFL is well capitalized and thus it is right prepared to finance periods that may be unfavorable within the economical business cycle. CAR is the abbreviation for capital adequacy ratio and this sign is very vital in activities of the financial institutions because it points to the level of loss absorption capacity of the company. Concisely, Bajaj Housing Finance has always made sure that it is left with a healthy CAR that boosts investor’s confidence.

Detailed Financial Analysis

Bajaj Housing Finance Limited or BHFL has posted good financial figures in the last few years and more remarkably in FY2024. There was an increase in revenue which was recorded at ₹7,617 that was 34% higher than the previous year. Up from 5,665 crore to ₹ 71 crore. 44 crore in FY2023. The latter’s net profit increased by 38%, to ₹1,731. 22 crore in FY2024, from ₹1,257 crore in FY2023,” the Business Standard reported. In the previous year it was 8 crore.

However, AUM have also increased in BHFL not only with strong financial backgrounds, but also they have highly experienced and talented employees. The company’s AUM as of March 2024 was ₹91,370 crore up from ₹ 88,830 Crore on a sequential basis due to improvement in home loans, lease rental discounting and developer finance lines of segments.

Bajaj Housing Finance was the next stock to come into my focus and hence, its share price.

The whole of the business analysis focuses on fundamental financial data of Bajaj Housing Finance Ltd and till September 20,2024; the price of the share was 164. 48. This on an average has gone up by 2. It’s up 73% from its previous close of ₹160. 11. With this F&O ban in place for the stock which has been as high as ₹168 at some point during the trading session. The maximum price was seen at ₹220 in 2015 whereas the minimum price was seen at ₹161 in June 2020. 45. This Firm known As Bajaj Housing Finance Ltd had been operating in the year with the 52 week range of between ₹146. 00 and ₹189. 00

Bajaj Housing Finance share price

The overall business analysis is done with the help of historical data of Bajaj Housing Finance Ltd and up to September 20, 2024, the share price of the company is 164. 48. This on an average has gone up by 2. It’s up 73% from its previous close of ₹ 160. 11. This F&O ban is now on the stock which has in the past touched the level of ₹168 during the course of the trading session. The highest price was ₹220 in the year 2015 whereas the lowest price was ₹161 in June, 2020. 45. This firm is referred to as Bajaj Housing Finance Ltd has been operating in the year with its 52 week range for being in between ₹146. 00 and ₹189. 00

The total market value of the stockholder is near to ₹1 crores. USD 36 trillion today with P/E ratio of 77. 95. Bajaj Housing Finance has been on a growth path and has become a consistent performer in the housing finance sector after having the strong financial and investor backing.

If potential investors are interested in this stock for the purpose of comparison and potentially investing in it then it is prudent to keep tabs both with other stocks that belong to the same sector and the overall market trends with regards to the particular company.

Market Position and Competitors

The existence of intense competition comes from traditional banks in addition to other players in the NBFC sector in which Bajaj Housing Finance competes. Key competitors are HDFC, LIC Housing Finance, PNB Housing Finance etc; besides that SBI and ICICI are some of the prominent players in the Home Loan segment.

But as mentioned, Bajaj Housing Finance has a powerful brand image to take support of the reputation of the Bajaj Group. Also, it has good technological support to have a very good online platform in offering of loans which is very important in the current dispensation. The company’s digital strength allows it to disburse loans within the shortest time possible so it is approved and increases customers’ satisfaction.

In regards to the value chain analysis, another important differentiator of BHFL is the product differentiation. The company is famous for offering tailored loan products for consumers, which makes it different from most of the existing similar companies as it tries to offer the right loan products depending on the needs of the consumers.

Bajaj Housing Finance Future Growth and Target Price

Future Growth

However, these are the potential pitfalls which Bajaj Housing Finance can afford to disregard due to the increasing housing requirement in the country. A key factor to consider is that the Indian government is focusing on increasing the affordable housing availability, coupled with the increasing trend of urban population, will make home loans sought after for the next few years. The upward trend of end-use capacities, supported by Bajaj Housing Finance’s sound brand, digital prowess, and customer-centricity will be beneficial to it.

Also, the company’s concentration on geographic diversification and reaching out to Tier 2 and Tier 3 markets has the potential to express highly promising growth scenarios. These markets have witnessed an uptick in real estate transactions in the last few years, and hence, Bajaj Housing Finance’s capacity to serve these areas will help to increase the loan volume.

Bajaj Housing Finance Target Price

Bajaj housing finance share price has been trading between 146-189 rupees per share since its IPO. And the company has shown a whopping CAGR of 29.8% in the past 5 years consistently. Using these factors we can calculate and predict Target share price of bajaj housing finance.

Financial Year	% CAGR (in Favourable condition)	% CAGR (in Non- favourable condition)	Expected Price Range (in INR)
FY 2025	18-25%	9-17%	205-245 INR
FY2026	16-24%	9-15%	293-326 INR
FY2027	15-21%	7-13%	350-376 INR
FY2028	15-20%	6-11%	389-410 INR
FY2029	15-20%	6-12%	414-446 INR
FY2030	15-19%	5- 9%	468-511 INR

Key Risks involved in Bajaj Housing Finance Share Target

Like any financial institution, Bajaj Housing Finance faces several risks that investors should consider before buying its shares:Like any financial institution, Bajaj Housing Finance faces several risks that investors should consider before buying its shares:

Economic Slowdown: It is established that the housing finance sector behaves pro-cyclically to the economy. This means that any decline in economic activities will result in a decline in home loan services and construction finance, which in turn affects the company’s revenues and profitability.
Interest Rate Fluctuations: Interest rates are a very essential factor in housing finance. If the rates go up, the cost of borrowing for the consumers and developers will also go high and this may lead to reduction in the demand for loans. Although most of Bajaj Housing Finance products are competitively priced in the market, sharp increases in the interest rates would reduce the finance disbursals.
Regulatory Changes: The housing finance industry comes under the realm of significant regulatory oversight of the RBI and other such authorities. This company may be affected by new regulation with reference to lending norms or any changes in the capital requirement standards that may affect BHFL.
Credit Risk: While this firm has presented good practices when it comes to risk management, credit risk still poses a problem in Bajaj Housing Finance. Two: Any decline in the credit rating of chiefly its borrowers poses a threat of increasing balance sheet NPAs.

Conclusion

The financial information of Bajaj Housing Finance makes it an attractive investment destination for any investor willing to invest in the Indian financial sector especially in the housing finance company. It is interesting to have a firm that has a sound financial position, sound managerial controls, and possibility of growth in the near future.

But, as it has been said, every investment has its risks connected not only to the sector but to the specific company as well. External conditions, for example, could affect the company’s position; these are the economic state, the change in interest rates and remote alteration in the regulation. Investors should also take particular attention to the nature of its assets and its competitiveness within the market it operates.

Thus, Bajaj Housing Finance companies’ shares can be considered to be a diversification investment of choice for those who expect a positive future development in the Indian housing finance sector. The company has a solid support of its promoter Bajaj Finance and has always prioritized its customer needs and wants hence is poised for further growth.

Also Read : Stock market timings in India

FAQ'S

Is Bajaj Housing Finance a good long-term investment ?

Yes, Bajaj Housing Finance showing a consistent annual growth of 29% yearly which is considered as tremendous in the Business world. It is definitely a good buy for a long time period.