Synopsis: BHFL shares tumbled 9% amid profit booking on Wednesday, following an impressive 169% surge since its IPO. Market optimism remains as PhillipCapital offers a positive outlook on the stock, valuing it at 6.5 times its book value for 2026, with a target price of Rs. 210.
Bajaj Housing Finance Ltd (BHFL), which recently debuted on the stock exchanges, experienced a sharp decline of 9.17% in its share price on Wednesday, falling to a low of Rs. 171.16 from a day's high of Rs. 188.45 on the Bombay Stock Exchange (BSE).
This significant drop follows a massive 169% surge in the stock since its initial public offering (IPO), which was priced at Rs. 70 per share.
The Bajaj Housing Finance IPO, held from September 9 to 11, attracted substantial interest, receiving bids worth Rs. 3 lakh crore.
Despite the recent fall, the stock has remained one of the top performers in the housing finance segment.
The housing finance company boasts a market capitalization of Rs.1.44 lakh crore after Wednesday's drop, placing it higher than other prominent players in the industry, such as Aadhar Housing, LIC Housing, Aavas Financiers, and Aptus Value Housing.
Analyst Recommendations and Long-Term Outlook:
Prashanth Tapse, Senior VP (Research) at Mehta Equities, advised conservative investors to consider booking profits after the stock's listing gains exceeded his expectations.
However, Tapse also recommended long-term investors to hold on to the stock, citing optimism about the company's business model and future growth potential in the housing finance sector.
According to PhillipCapital, BHFL operates in a highly attractive segment, focusing on home loans with an average ticket size of Rs. 50 lakh, catering to 65% of the home loan market in India.
Additionally, BHFL is actively expanding into lease rental discounting (LRD), a high-yield segment, while maintaining a controlled construction finance portfolio.
PhillipCapital anticipates that the company’s balance sheet could grow to Rs. 2 lakh crore within three years.
The brokerage also expects credit costs for BHFL to remain low in the near term, with the company focusing on maintaining a low-risk balance sheet.
Return on Assets (RoA) and Return on Equity (RoE) are projected at 2% and 12%, respectively, driven by improvements in expense ratios and strong return potential.
In conclusion, while the initial dip in Bajaj Housing Finance's stock price has caused concern, market analysts remain optimistic about the company's long-term prospects.
With a focus on high-demand home loan segments and expanding operations into lucrative areas, BHFL is well-positioned for growth.
Investors looking for long-term value should consider the stock favorably, although some short-term profit booking is expected after its recent IPO surge.
Disclaimer: This article is for informational purposes only and should not be considered as financial or investment advice. Always consult with a qualified financial advisor before making any investment decisions.
