A brokerage called Kotak Institutional Equities has given Bajaj Housing Finance shares a ‘sell’ rating because they believe the stock is too expensive. They set a target price of Rs 100, which suggests that the stock could fall by 21%.
According to Kotak, Bajaj Housing Finance is trading at a high price—4.7 times its book value and 39 times its expected earnings for 2026. The brokerage predicts that the company will grow its earnings by 25% each year from 2024 to 2027, mainly due to a 24% growth in its assets. They also expect the company’s profit margins to stay steady and plan to manage costs carefully.
Bajaj Housing Finance is the second-largest home loan company in India, with Rs 91,400 crore in assets this year. They focus on lending to salaried workers who have good jobs. The company has been growing rapidly, with an expected growth rate of 24% for the next few years. Their loan types include home loans (58%), loans against property (10%), and loans for developers (11%).
Bajaj Housing Finance has kept its asset quality strong, with bad loans at just 0.3% this year, which is much better than many of its competitors. They have good strategies to keep credit risks low, focusing on safe borrowers and using smart technology for lending.
Despite these strengths, Kotak warns that there are risks involved, such as changes in interest rates and tough competition in the market. As of 1:30 PM today, the Bajaj Housing Finance stock was unchanged at Rs 126.50.
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