ICICI Securities Recommends Buy in Bajaj Housing Finance, Targets Price of Rs 125

Bajaj Housing Finance Posts Steady Q4FY26 Performance

Bajaj Housing Finance (BHFL) has reported a steady performance for the fourth quarter of fiscal year 2026, with return on assets (RoA) and return on equity (RoE) standing at 2.2% and 12%, respectively. These figures align with the company's management guidance and its eight-quarter average.

Despite intensified competition in the prime housing segment, which has put pressure on net interest margin (NIM), BHFL's profit after tax (PAT) remained flat sequentially at INR 6.65 billion. However, management remains optimistic about maintaining a 2.0-2.2% RoA for fiscal year 2027.

BHFL's diversified portfolio across home loans (HL), loan against residential property (LRD), demand finance (DF), and loan against property (LAP) positions the company well to capture a broader market share. The company is targeting a 5% share of home loan originations, up from the current 2.5-2.7%.

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Outlook and Recommendation

In light of BHFL's steady performance and optimistic outlook, ICICI Securities maintains a BUY rating on the stock with an unchanged target price (TP) of INR 125. This valuation is based on a price-to-book (P/B) ratio of 4 times the company's estimated price for fiscal year 2027.

Note: The above table presents ICICI Securities' recommendation for Bajaj Housing Finance based on a price-to-book ratio of 4 times the company's estimated price for fiscal year 2027.

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