Brokerage firm Motilal Oswal maintained a ‘Neutral’ rating on the stock, with a target price of ₹120, implying a potential upside of 10% from current levels.
Motilal said Bajaj Housing delivered a strong performance in Q2, with robust assets under management (AUM) and disbursement growth across products, despite heightened competition.The company maintained its margins in a declining interest rate environment while preserving strong asset quality.
The brokerage said that Bajaj Housing Finance remains a strong franchise, well-positioned to navigate rising competition and a softer rate cycle while sustaining healthy growth and profitability.However, it highlighted key risks such as a potential slowdown in overall growth and demand, limited ability to expand net interest margins (NIM) amid competitive pricing, and possible asset-quality pressure if the company scales up its non-prime segments.
Motilal expects the company’s loans and profit to grow at a compound annual growth rate (CAGR) of 22% over FY25-28, with return on assets (RoA) and return on equity (RoE) estimated to reach 2.3% and 14.2%, respectively, by FY28.
Bajaj Housing Finance was among the most successful listings of last year, debuting at a premium of more than 100% to its IPO price of ₹70.
However, after hitting a post-listing high of over ₹180, the stock has since corrected nearly 40% and is now trading close to the ₹100 mark.
On Thursday, shares ended 0.3% lower at ₹109.25 ahead of the results announcement. The stock is down 15% so far this year.
