15th June, 2025

Vspartans Consultants Pvt Ltd

Research Report : Bajaj Housing Finance Ltd.

NSE Code: BAJAJHFL
Recommendation: BUY
Current Price: ₹121.63
Target: ₹152
Potential Upside Around: 25.26%
Expected Holding Period: 9 to 12 Months
Financial Ratios:

Market Cap ₹1,01,346 Cr Promoters 88.75%

Holding

Current Price ₹121.63 Pledging % 0.00%

52 Wk High/Low ₹188/103 Debt to Equity 4.11

PE Ratio 46.9 EPS (TTM) ₹2.60

Book Value ₹24 Dividend Yield 0.00%

ROCE 9.54% ROE 13.4%

Company Overview

Bajaj Housing Finance Limited (BHFL) is a leading non-deposit-taking Housing

Finance Company (HFC) in India. It is a wholly-owned subsidiary of Bajaj Finance
Limited (BFL), which is further owned by Bajaj Finserv Limited, part of the
diversified Bajaj Group.

Incorporation and Rebranding

2008: Incorporated as Bajaj Financial Solutions Limited.

2014: Renamed to Bajaj Housing Finance Limited to reflect its focused
strategy in the housing finance domain.

Regulatory Recognition

NHB Registration: Registered with the National Housing Bank (NHB) as a

non-deposit-taking HFC since September 2015.
RBI Classification: Classified as an "Upper Layer NBFC" under RBI’s Scale-
Based Regulations since September 2022, reflecting its systemic
importance.

IPO Milestone
 June 2024: Filed a ₹7,000 crore Draft Red Herring Prospectus (DRHP) with
SEBI for an Initial Public Offering (IPO) with the objective of strengthening
the capital base and complying with RBI’s listing mandate for Upper Layer
NBFCs.

Products and Services

BHFL offers a wide suite of mortgage-backed financial solutions to both

individuals and corporates. Key offerings include:

Retail Loan Products

Home Loans: For purchase, construction, or renovation of residential

properties. Available with repo rate linkage and flexible tenure.
Loan Against Property (LAP): Secured loans against residential or
commercial property for business or personal use.
Lease Rental Discounting: Loans against future rent receivables from
commercial property leases.

Corporate Lending

Developer Finance: Project finance solutions for developers constructing

residential or commercial properties.

Customer-Focused Features

Balance Transfer Facility: Enables customers to transfer existing home loans

from other lenders at competitive rates.
Flexi Loan Facility: Allows part withdrawal and part payment, reducing
interest burden and enhancing customer convenience.
Strong Quarterly Growth with Diversified Mortgage Portfolio

1. Business Performance Overview

AUM Growth

Assets Under Management (AUM) grew by 26% YoY, reaching

₹1,14,684 crore in Q4 FY25, compared to ₹91,370 crore in Q4 FY24.
Quarterly AUM growth was ₹6,370 crore, up from ₹5,442 crore in Q4 FY24
and ₹5,745 crore in Q3 FY25.

Disbursement Growth

Loan disbursements increased by 25% YoY, from ₹11,393 crore in Q4 FY24 to

₹14,254 crore in Q4 FY25.
This reflects strong demand and a robust lending pipeline.

2. Portfolio Composition by AUM

Diversified Asset Mix (Q4 FY25)

The portfolio remains well-diversified across secured mortgage products:

Home Loans: 56.2%
Loans Against Property (LAP): 19.1%
Lease Rental Discounting (LRD): 10.7%
Developer Finance: 12.5%
Others: 1.5%

YoY Growth in Loan Segments

Developer Finance: ↑ 49%

Loan Against Property: ↑ 28%
Lease Rental Discounting: ↑ 24%
Home Loans: ↑ 22%

3. Strategic and Operational Highlights

Focus on Affordable and Prime Housing

 The Strategic Business Unit (SBU) catering to affordable and near-prime
housing continues to perform strongly, aligned with market expectations.

Management and Expansion

The company has enhanced its leadership capabilities.

BHFL plans to deepen presence in non-metro and semi-urban markets in
FY26 to capture untapped demand.

BHFL's Q4 FY25 performance reflects strong operational momentum, driven by

a sharp rise in AUM and disbursements. The dominance of home loans (56.2%)
and robust growth across all secured segments underlines its strategic focus on
mortgage-based lending.

Robust Asset Quality, Healthy Profitability, and Prudent Funding Mix

1. Asset Quality Indicators (Q4 FY25)

Gross NPA (GNPA):

0.29% in Q4 FY25
Flat compared to Q3 FY25 (0.29%)
Net NPA (NNPA):
0.11% in Q4 FY25
Improved from 0.13% in Q3 FY25

BHFL maintains exceptionally low GNPA and NNPA ratios, indicating strong
credit underwriting standards and effective risk management practices.

2. Profitability Indicator

Return on Assets (ROA):

2.4% in Q4 FY25
Stable from Q3 FY25 (2.4%)
Improved from Q4 FY24 (2.0%)

A healthy ROA of 2.4% reflects operational efficiency and strong earnings

performance in the mortgage lending space.
3. Borrowing Mix (Q4 FY25)

Bank Borrowings: 41.%

Money Market Instruments (e.g., NCDs, CPs): 49%
NHB (National Housing Bank): 10%

A well-balanced borrowing profile with a higher share from money markets

enhances funding flexibility and cost optimization. NHB exposure adds stability,
while bank borrowings offer long-term funding support.

Bajaj Housing Finance Ltd. maintains strong asset quality with GNPA at 0.29%
and NNPA at 0.11%, reflecting prudent credit practices. Its robust ROA of 2.4%
highlights consistent profitability. A well-diversified borrowing mix ensures
funding stability and cost efficiency.

Human Capital

A. Workforce Strength

As of March 31, 2025, Bajaj Housing Finance had a total employee strength
of 1,977.

B. Talent & Capability Focus

The company maintains a lean yet skilled workforce, reflecting its focus on
productivity and technology-enabled service delivery. The workforce is
distributed across its 216-branch network and centralized processing hubs,
enabling consistent service quality and business execution.

BHFL’s human resource strategy emphasizes efficiency, training, and customer

orientation, supporting its growth while keeping personnel costs optimized.

Branch and Distribution Network

Headquarters: Based in Pune, Maharashtra, India.

Branch Network: 216 branches
Coverage: 174 locations across 22 states/union territories
 Operational Backbone:
6 Centralized Retail Loan Review Centers
7 Centralized Loan Processing Centers

Geographical Asset Under Management (AUM) Bifurcation

The AUM is geographically diversified, but heavily skewed toward certain key
states:

State/Region % of AUM

Maharashtra 32.0%

Karnataka 22.7%

Telangana 14.8%

Gujarat 8.1%

New Delhi 7.6%

Tamil Nadu 5.2%

West Bengal 1.7%

Rajasthan 1.6%

Uttar Pradesh 1.6%

Haryana 1.3%

Madhya Pradesh 1.2%

Others 2.2%
Top 3 states (Maharashtra, Karnataka, Telangana) contribute ~69.5% of total
AUM, reflecting a concentration in high-growth urban markets.

Portfolio Segment-Wise Analysis

1. Home Loans

Customer Profile:
Salaried: 85%
Self-Employed: 11%
Professionals: 4%
Average Customer Salary: ₹14.7 lakh per annum
Geographic Reach: 174 locations across India
Assets Under Management (AUM): ₹64,447 crore
Observations:
Dominated by salaried customers, reflecting stable income profiles.
Strong geographical presence supports broad retail penetration.

2. Loan Against Property (LAP)

Customer Profile:
Self-Employed: 76%
Salaried: 17%
Professionals: 7%
Geographic Reach: 74 locations
AUM: ₹12,262 crore
Observations:
Heavily skewed towards self-employed borrowers, indicating tailored
solutions for MSMEs and entrepreneurs.
Lower location spread than home loans, implying more focused sourcing.

3. Lease Rental Discounting (LRD)

Active Customers: 292

Geographic Reach: 17 locations
 AUM: ₹21,913 crore
Observations:
High ticket size segment with relatively fewer customers.
Primarily urban and commercial real estate focused.

4. Developer Financing

Active Developer Relationships: 519

Active Projects: 798
Geographic Reach: 16 locations
AUM: ₹14,346 crore
Observations:
Diversified across numerous real estate developers and projects.
Strategic exposure to residential and commercial project financing.

BHFL’s portfolio reflects a balanced mix of retail and wholesale exposure, with
strong salaried dominance in home loans and entrepreneurial focus in LAP. The
company’s selective geographic targeting in LRD and Developer Finance
segments supports risk-managed growth in high-value lending verticals.

Technology & Digital Initiatives

A. Digitization of Processes

Bajaj Housing Finance continues to make strong strides in its digital

transformation journey by leveraging technology to streamline and modernize
customer interactions and internal operations. The company’s focus on digital
has enhanced efficiency, reduced turnaround time, and improved customer
satisfaction.

B. Key Digital Milestones (as of March 2025)

E-Agreements:
BHFL successfully achieved over 93% penetration in digital agreement
execution, reducing paperwork, increasing operational speed, and ensuring
smoother compliance.
 Online Customer Onboarding:
The company reached 80% digital onboarding, indicating high customer
adoption and improved process convenience.

These achievements reflect BHFL’s commitment to becoming a tech-first

housing finance provider, aligning with evolving consumer expectations and
regulatory focus on digital adoption.

Analysis of Strong Macro Tailwinds in India's Real Estate Market

The Indian real estate market is witnessing robust growth, driven by strong
residential and commercial sector dynamics. Below is a detailed breakdown of
the key macroeconomic trends shaping the market.

1. Residential Real Estate: Surge in Sales and Premiumization

Steady Growth in Residential Sales

Total Transactions: According to a report by Square Yards, total registered

residential transactions in major Indian cities reached 5.44 lakh units in
FY25, a significant 77% increase from 3.07 lakh units in FY19 (pre-pandemic
levels).

Primary vs. Secondary Sales:

Primary transactions (new or under-construction homes directly from

developers) accounted for 57% of the total, reaching approximately 3.11
lakh units.
Secondary transactions (resale or pre-owned properties) made up the
remaining 43%, with volumes rising to approximately 2.33 lakh units. This
indicates a growing preference for ready-to-move-in homes.

Strong Economic Fundamentals Driving Demand

India’s high GDP growth rate and stable economic environment continue to
bolster investor confidence.
 Despite global uncertainties, India remains a preferred destination for real
estate investments.

Homebuyer Demand at Record Levels

Major cities like Hyderabad, Pune, and Mumbai have reported all-time high
sales volumes.
Increasing demand from both end-users and investors supports market
resilience.

Shift Towards Premium Housing (Premiumization Trend)

46% of total sales in H2 2024 were in the ₹1 Cr+ (₹10 million+) segment,
indicating a preference for premium properties.
The ₹2-5 Cr (₹20-50 million) category saw 62% YoY growth, reflecting rising
aspirational purchases.

Stable and Growing Property Prices

Bengaluru (+12% YoY), Mumbai (+5% YoY), and NCR (+6% YoY) led price
growth.
Sixth consecutive half-yearly increase in property prices, reinforcing strong
demand and investor confidence.

2. Commercial Real Estate: Strong Office Market Growth

Record-High Office Transactions in 2024

Annual transaction volume reached 6.68 million sq m (71.9 million sq ft),

surpassing the previous peak in 2019 by 19%.
Bengaluru, Mumbai, and NCR accounted for 57% of total transactions,
cementing their positions as key business hubs.

Evolving Demand Drivers in Commercial Spaces

India-facing businesses have overtaken third-party IT services as the

primary demand drivers, contributing 36% of total transactions in 2024.
 Global Capability Centres (GCCs) now account for 31% of office space
absorption, reflecting the growth of multinational corporate operations in
India.

Office Space Supply & Vacancy Rate Trends

New office supply fell short of demand, with only 2.34 million sq m (25.2
million sq ft) added in Q3FY25.
Vacancy rates declined from 17.2% (H2 2021) to 15.0% (H2 2024), showing
strong absorption levels.
NCR (8.4%) and Chennai (6.8%) reported the lowest vacancy rates, indicating
high occupancy levels in these regions.

Rental Growth Due to Supply Constraints

Rents increased between 3% and 7% YoY across major markets.

Hyderabad saw the highest rental growth at 7% YoY, followed by Bengaluru
and Chennai at 6% YoY.

The Indian real estate market is in a strong upcycle, fueled by:

- Record-breaking residential sales and premiumization.
- Sustained demand in commercial real estate, driven by India-facing
businesses & GCCs.
- Declining vacancy rates and rising rental yields.
- Favorable macroeconomic conditions supporting investor confidence.

These trends indicate a positive long-term outlook for both residential and
commercial real estate investments in India.

Real Estate & Housing Industry Outlook

The Indian real estate sector is projected to expand substantially, reaching a

value of USD 5.8 trillion by 2047. Private equity firms and foreign investors are
actively participating in the market, injecting capital and fostering growth. There
is a predicted rise in affordable housing projects to cater to a broader segment
of buyers.
Market Improvement

Residential Real Estate: Prime locations have seen robust expansion in sales
and new developments, with reduced unsold inventory and holding costs.
Demand Drivers: Low interest rates, rising property prices, increased
affordability, and tax incentives on home loans are boosting demand for
housing loans.

Corporate Demand

Office and Residential Spaces: Return to offices has increased demand for
both office and residential spaces in major metropolitan areas, with a rising
trend in co-working spaces.

Growth Potential

Low Mortgage to GDP Ratio: India's mortgage sector has substantial growth
potential due to low penetration and housing shortage.
Affordable Housing Sector: Significant growth prospects, catering to
underserved segments like non-salaried individuals, MSMEs, and blue-collar
workers.
Technology Integration: Affordable housing finance companies balancing
technology with direct customer interaction for better customer
relationships and loan performance.

Deep Dive into Market Segmentation of the Indian Housing Finance Industry

The Indian housing finance industry employs diverse segmentation strategies to

effectively cater to the varied needs of borrowers across the country.

Key Segmentation Approaches

Borrower Demographics:

Age: Segmented into young professionals (25-35), middle-aged individuals

(36-50), and retirees (50+), each with specific preferences for loan terms
and technological adoption.
 Income: Categorized into high-income earners seeking high-value loans,
middle-income earners prioritizing affordability, and low-income earners
benefiting from government schemes like PMAY.

Employment Status:

Salaried Individuals: Predominant segment with stable income, opting for

standardized loan products.
Self-employed Professionals: Require flexible documentation and
alternative income verification methods.
NRIs: Have specific requirements concerning loan tenure, interest rates,
and property ownership regulations.

Loan Purpose:

Purchase of New Property: Most common purpose with tailored loan-to-

value ratios and repayment options.
Construction Finance: Loans linked to construction milestones for self-
built homes.
Home Renovation & Improvement: Loans for renovations, repairs, or
extensions with shorter repayment periods.
Balance Transfer: Involves transferring existing home loans to secure
better rates or consolidate debts.

Location:

Tier 1 Cities: Higher property values prompt tailored interest rates,

focusing on high-value loans.
Tier 2 & 3 Cities: Rising demand for affordable housing finance with
schemes featuring lower down payments and flexible terms.

Loan Features:

Interest Rate Options: Fixed vs. floating rates to cater to varying risk
appetites.
 Repayment Flexibility: Options like step-up or balloon payments meeting
specific borrower needs.
Loan Processing Speed: Expedited processing for targeted borrower
segments enhancing customer satisfaction.

Benefits of Market Segmentation

Targeted Products & Services: Customized loan offerings lead to higher

satisfaction and uptake among borrowers.
Risk Management: Better understanding of borrower profiles enables
lenders to mitigate risks effectively.
Marketing & Distribution: Targeted campaigns improve efficiency by
reaching the right audience with relevant messaging.

Market segmentation is integral for Indian housing finance companies to meet

the diverse demands of borrowers effectively. By leveraging insights into
borrower demographics, employment status, loan purpose, location, and
desired features, lenders can enhance customer engagement and achieve
sustainable growth in this dynamic market.

Comprehensive and structured analysis of the RBI’s June 6, 2025 monetary

policy decision and its positive implications for the Indian banking sector:

RBI's Policy Move: A Pro-Growth Signal

Key Announcements (June 6, 2025)

Repo Rate Cut: Reduced by 50 basis points (bps) to 5.50%.

CRR Cut: Reduced by 100 bps to 3%, implemented in a staggered manner.
Cumulative Cuts in 2025: 100 bps since February 2025 – the third
consecutive rate cut this year.

Implications for the Indian Banking Sector

1. Lower Cost of Funds & Increased Liquidity

 Repo rate cut reduces the borrowing cost for banks, enabling cheaper
funding.
CRR reduction unlocks approx. ₹2.5 lakh crore, significantly boosting lending
capacity.
Banks can now lend more aggressively at lower rates, especially in a benign
inflation environment.

2. Boost to Credit Growth

Lower interest rates are expected to spur demand across:

Home loans, auto loans, personal loans
MSME and corporate credit
Banks can grow their loan books faster, directly enhancing revenue and
profitability.
Aligns with RBI’s growth-supportive policy approach amid stable inflation.

3. Positive Impact on Net Interest Margins (NIMs)

In the short term, NIMs may face pressure due to rate transmission to
borrowers.
Over time, as loan volumes grow and deposit rates adjust downward,
margins are likely to:
Stabilize, and
Improve, aided by scale benefits and improved asset performance.

4. Strengthening Financial Inclusion

Cheaper loans improve access for:

Underserved populations
First-time borrowers
Micro-entrepreneurs and rural credit seekers
Supports the government’s financial inclusion and social upliftment agenda.

5. Improvement in Asset Quality

Economic stimulus leads to:

 Stronger household finances
Improved business earnings
Result: Lower default risks, healthier loan portfolios, and reduced NPAs for
banks.

6. Growth in Lending & Sectoral Support

Sectors set to benefit the most:

Real Estate: Lower EMIs boost housing demand.
MSMEs: More affordable working capital and capex funding.
Banks get a wider and more diversified lending opportunity base.

7. Enhanced Market Sentiment and Activity

RBI’s “frontloaded” cuts reflect policy urgency to stimulate growth.

Boosts business and investor confidence, leading to:
Higher investment
Increased banking transactions
Greater fee-based income for banks (credit cards, digital payments, etc.)

8. Policy Clarity through Neutral Stance

Shift from “accommodative” to “neutral” stance:

Suggests rate action will now be data-dependent.
Allows banks to strategize confidently with improved policy predictability.
Indicates RBI sees scope for growth without stoking inflation.

Conclusion: Strong Tailwinds for the Banking Sector

The RBI’s policy actions—especially the surprise 50 bps rate cut and liquidity
infusion via CRR—represent a decisive pro-growth shift. For Indian banks, this
translates into:

Lower funding costs

Improved liquidity
Accelerated loan growth
 Better asset quality
Increased profitability and financial strength

The Indian banking sector stands to benefit significantly from policy moves,
positioning its a key enabler of economic recovery and expansion in FY26.

Key Financial Data:

All figures except EPS are in INR Crore Source: screener.in

Quarterly P&L Mar-23 Jun-23 Sep-23 Dec-23 Mar-24 Jun-24 Sep-24 Dec-24 Mar-25

Sales 1,585 1,763 1,911 1,946 1,996 2,209 2,410 2,449 2,508

Financing Profit 416 536 585 582 498 640 718 723 731

Other Income 0 0 0 0 0 0 0 0 0

Profit Before Tax 407 526 575 572 488 630 708 713 720

Net Profit 301 462 451 437 381 483 546 548 587

EPS 0.45 0.69 0.67 0.65 0.57 0.62 0.66 0.66 0.70

Comprehensive analysis of the Quarterly Profit and Loss (P&L) statement of

Bajaj Housing Finance Ltd from Mar-23 to Mar-25:

Sales Growth and Trend

Steady growth in sales over the quarters from ₹1,585 Cr in Mar-23 to ₹2,508
Cr in Mar-25.
Year-on-year (YoY) growth:
Mar-23 to Mar-24: ~26%
Mar-24 to Mar-25: ~25.7%
Indicates consistent loan book expansion and robust disbursement trends.

Financing Profit (Net Interest Income)

Grew from ₹416 Cr (Mar-23) to ₹731 Cr (Mar-25), a ~75% rise over 2 years.
Healthy NII growth implies effective interest margin management and asset
growth.

Other Income

Nil across all quarters, indicating the company is focused purely on core
financing operations without reliance on non-core income sources.

Profit Before Tax (PBT)

 Increased from ₹407 Cr (Mar-23) to ₹720 Cr (Mar-25), ~77% growth in 2 years.
Mirrors the financing profit trajectory, reflecting controlled operating and
credit costs.

Net Profit

Grew from ₹301 Cr (Mar-23) to ₹587 Cr (Mar-25), representing a CAGR of

~41%.

Earnings Per Share (EPS)

EPS rose from ₹0.45 (Mar-23) to ₹0.70 (Mar-25).

Consistent increase implies value accretion for shareholders and scalable
earnings profile.

Margins and Efficiency Indicators

Financing Profit Margin (Financing Profit/Sales) is stable, hovering around

29-30%.
Net Profit Margin improved slightly over time, from ~19% in Mar-23 to ~23%
in Mar-25.
This reflects better operating leverage and efficient cost management.

All figures except EPS are in INR Crore

Yearly P&L Mar-20 Mar-21 Mar-22 Mar-23 Mar-24 Mar-25

Sales 2,646 3,155 3,767 5,665 7,617 9,576

Financing Profit 591 635 986 1,734 2,201 2,811

Other Income Normal -0 0 -0 -0 -0 0

Profit Before Tax 567 613 960 1,700 2,161 2,770

Net Profit 421 453 710 1,258 1,731 2,163

EPS (split adjusted) 0.86 0.93 1.45 1.87 2.58 2.60

Detailed analysis of the Yearly Profit and Loss (P&L) statement of Bajaj Housing
Finance Ltd from FY20 to FY25:

Sales (Revenue) Trend

Sales have grown significantly from ₹2,646 Cr in FY20 to ₹9,576 Cr in FY25.

 This reflects a CAGR of ~29% over 5 years, showcasing strong loan book
expansion and robust disbursement growth.

Financing Profit (Net Interest Income)

Increased from ₹591 Cr in FY20 to ₹2,811 Cr in FY25, reflecting a CAGR of

~36%.
Sharp growth in FY23 (+76%) and FY24 (+27%) underscores margin expansion,
growing loan book, and efficient borrowing.
This growth has largely outpaced sales, indicating operating leverage and
stable spreads.

Other Income

Zero or negligible across all years (from FY20 to FY25).

Indicates the company is maintaining a pure lending model, focusing on its
core financing business.

Profit Before Tax (PBT)

PBT rose from ₹567 Cr in FY20 to ₹2,770 Cr in FY25, almost 5x growth in 5

years.
Closely tracks financing profit, suggesting low credit losses, efficient
operations, and controlled expenses.

Net Profit

Grew from ₹421 Cr in FY20 to ₹2,163 Cr in FY25, a CAGR of ~39%.

This growth is indicative of strong profitability and sound risk management.

Earnings Per Share (EPS) – Split Adjusted

EPS improved from ₹0.86 (FY20) to ₹2.60 (FY25).

Indicates 3x growth in shareholder returns in 5 years.
Slight flattening in FY25 (₹2.58 → ₹2.60) may point to capital infusion or
dilution or asset mix changes.
Margins and Efficiency

Net Profit Margin increased from ~15.9% in FY20 to ~22.6% in FY25.

Financing Profit Margin also expanded over the years, suggesting strong cost
control and pricing power.
Overall profitability improvement signals operating scale benefits and tight
expense management.

Overall Assessment

Strong and consistent growth in revenue, net interest income, and profits.
Zero dependency on other income, reflecting core business strength.
Margin expansion, operating leverage, and growing EPS suggest a mature,
scalable, and well-managed NBFC.
Performance supports potential listing readiness or capital market
participation.

All figures are in INR Crore Source: screener.in

Balance Sheet Mar-20 Mar-21 Mar-22 Mar-23 Mar-24 Mar-25

Share Capital 4,883 4,883 4,883 6,712 6,712 8,328

Reserve 702 1,149 1,858 3,791 5,521 11,619

Borrowing 25,600 31,601 41,492 53,745 69,129 82,072

Other Liabilities 187 226 293 406 464 790

Total Liabilities 31,372 37,858 48,527 64,654 81,827 102,809

Fixed Assets 86 79 97 113 123 141

CWIP 0 0 1 0 1 0

Investments 2,508 3,266 1,248 2,001 1,939 2,533

Other Assets 28,779 34,513 47,180 62,540 79,765 100,134

Total Assets 31,372 37,858 48,527 64,654 81,827 102,809

Balance Sheet of Bajaj Housing Finance Ltd for the financial years FY20 to FY25:
Share Capital

Remained constant at ₹4,883 Cr from FY20 to FY22.

Increased to ₹6,712 Cr in FY23 and further to ₹8,328 Cr in FY25.
Indicates equity infusions, likely to support loan book expansion and
maintain capital adequacy ratios.

Reserves

Strong growth from ₹702 Cr (FY20) to ₹11,619 Cr (FY25) — CAGR of ~72%.

Driven by consistent retained earnings from net profits.
Indicates strong internal accruals and robust profitability retention.

Borrowings

Increased from ₹25,600 Cr in FY20 to ₹82,072 Cr in FY25 — more than 3x

growth.
Reflects expanding loan book and funding of housing finance assets.

Other Liabilities

Gradual rise from ₹187 Cr (FY20) to ₹790 Cr (FY25).

Represents accruals, provisions, and other payables.
Maintains a small proportion of total liabilities, indicating a clean and
focused balance sheet.

Total Liabilities

Increased from ₹31,372 Cr in FY20 to ₹102,809 Cr in FY25 — CAGR of ~27.5%.

Mirrors the expansion in borrowings and equity.
Signifies rapid asset-side growth funded by both debt and equity.

Fixed Assets & CWIP

Fixed Assets rose modestly from ₹86 Cr (FY20) to ₹141 Cr (FY25).

Capital Work-in-Progress (CWIP) remains negligible.
Reflects an asset-light business model typical of NBFCs.
 Infrastructure investments are minimal, reinforcing a digitally-enabled, low
fixed-cost model.

Investments

Declined from ₹2,508 Cr in March 2020 to ₹1,248 Cr in March 2022, before

recovering to ₹2,533 Cr by March 2025.
Likely includes liquidity reserves, strategic investments, or group-level
placements.
Minor part of total assets — signals focus on core lending operations.

Other Assets

Rose sharply from ₹28,779 Cr in FY20 to ₹100,134 Cr in FY25 — nearly 3.5x

growth.
Represents loan book (housing finance assets), receivables, and advances.
Core driver of total asset growth — reflects high demand for housing loans
and strong disbursement growth.

Total Assets

Expanded from ₹31,372 Cr (FY20) to ₹102,809 Cr (FY25) — CAGR of ~27.5%.

Growth closely matches liability expansion, indicating balanced asset-
liability management.
Demonstrates scaling with financial discipline and strong capital backing.

Overall Financial Position

Company has tripled its asset base over 5 years while maintaining a healthy
capital structure.
Growth driven primarily by loan book expansion, funded through a mix of
borrowings and equity infusions.
Strong internal accruals and controlled liabilities ensure financial resilience.
Ready for potential listing or credit rating upgrades based on balance sheet
strength.
Shareholding Pattern:

Shareholding Pattern Sep-24 Dec-24 Mar-25

Promoters 88.75% 88.75% 88.75%

FIIs 1.68% 1.11% 1.12%

DIIs 1.83% 0.82% 0.72%

Government 0.11% 0.00% 0.00%

Public 7.63% 9.32% 9.40%

Source: screener.in All figures are in percentage

Shareholding pattern of Bajaj Housing Finance Ltd for the period from
September 2024 to March 2025:

Promoters

Holding has remained constant at 88.75% throughout Sep-24 to Mar-25.

Reflects strong promoter confidence and tight control over the company.

Foreign Institutional Investors (FIIs)

FII holding declined from 1.68% in Sep-24 to 1.11% in Dec-24, then slightly
recovered to 1.12% in Mar-25.
The decline may indicate profit-booking, valuation concerns, or portfolio
rebalancing.
The marginal increase in Mar-25 suggests stabilization of FII interest.

Domestic Institutional Investors (DIIs)

DII holding fell from 1.83% in Sep-24 to 0.72% in Mar-25.

Steady decline may reflect tactical exit or allocation shift.

Government
 Government holding was minimal at 0.11% in Sep-24, and completely exited
by Dec-24.

Public Shareholding

Increased from 7.63% (Sep-24) to 9.40% (Mar-25) — a significant 1.77% rise

over two quarters.
Potentially reflective of increased market visibility, IPO Participation.

Overall Assessment

In total, nearly 91% of the shares are held by strong hands—comprising

promoters, DIIs, and FIIs—indicating high confidence in the company and its
parent group.

Technical Chart Analysis:

Despite currently trading below its IPO level, Bajaj Housing Finance Ltd.
displays a bullish setup both technically and fundamentally. From a technical
standpoint, the stock has formed a classic Cup with Handle pattern, with a
confirmed breakout. Although recent market volatility caused a pullback to the
handle region, renewed buying interest has since emerged.

On the fundamental side, several factors support the company’s long-term

potential. The company has delivered its highest-ever revenue and net profit,
while maintaining one of the lowest NPAs in the industry, reflecting exceptional
financial performance and strong asset quality. The stock had earlier touched its
lifetime high of ₹188.50 in September 2024. Based on the Cup with Handle
strategy, the immediate target is set at ₹152, offering a potential upside of
25.26% from the current market price of ₹121.63. Over the longer term (9–12
months).

This analysis suggests a compelling buying opportunity at current levels, with

potential medium term gains.

Based on the comprehensive research report provided, here are ten strong
points supporting a buy recommendation for Bajaj Housing Finance Ltd:

1. Strong Parentage and Backing of Bajaj Group

BHFL is a wholly owned subsidiary of Bajaj Finance Ltd., a highly reputed
NBFC.
 The support from Bajaj Finance ensures access to capital, operational
guidance, and brand trust—critical for growth in housing finance.
2. Robust Asset Under Management (AUM) Growth and Diversification
BHFL’s AUM is diversified across retail and wholesale mortgage products:
Home Loans (56.2%), LAP (19.1%), Lease Rental Discounting (10.17%), and
Developer Finance (12.5%) and others (1.5%).
Such diversification mitigates portfolio risk and enhances yield stability.
3. Strong Asset Quality and Financial Resilience
Bajaj Housing Finance Ltd. showcased exceptional asset quality in Q4 FY25,
with GNPA and NNPA at 0.29% and 0.11% respectively, underscoring
disciplined underwriting and risk controls. A stable and healthy ROA of 2.4%
reflected sustained profitability and operational strength. The borrowing mix
remained well-diversified, with 49% sourced from cost-efficient money
market instruments, ensuring both liquidity and funding stability.
4. Efficient Human Capital Deployment
Operates with a lean workforce of 1,977 across 216 branches.
Emphasis on technology and productivity ensures scalability without
proportionate increases in cost.
5. Geographical Concentration in High-Growth Urban Markets
Top 3 states—Maharashtra (32%), Karnataka (22.7%), and Telangana (14.8%)
contribute ~70% of AUM.
These states are major hubs of residential and commercial activity, offering
high growth potential.
6. Strong Industry Tailwinds from Booming Real Estate Sector
Residential sales hit a 12-year high in 2024; premium housing (>₹1 Cr) formed
46% of H2 2024 sales.
Commercial leasing surpassed pre-COVID highs, with vacancy rates falling
and rentals rising.
Rising demand across segments boosts mortgage and LRD loan
opportunities for BHFL.
7. Favorable Budget 2025 Provisions and RBI’s Monetary Policy
No Tax up to ₹12 lakh gives middle-income groups higher disposable income,
favoring real estate and home loans.
50 bps repo rate cut makes home loans more affordable, boosting BHFL’s
product attractiveness.
8. Deep Penetration Across Diverse Geographies and Segments
Presence in 174 cities across 22 states/UTs, enabling reach across India’s
growing urban centers.
Product segmentation tailored to salaried, self-employed, professionals, and
developers increases market coverage.
 9. Consistent and Strong Revenue Growth
Sales have grown from ₹1,585 Cr (Mar-23) to ₹2,508 Cr (Mar-25), representing
a YoY growth of ~26% consistently.
Annual revenue rose from ₹2,646 Cr (FY20) to ₹9,576 Cr (FY25) — a robust
CAGR of ~29%, driven by loan book expansion and housing credit demand.
Bajaj Housing Finance Ltd. achieved its highest-ever net profit, rising from
₹421 crore in March 2020 to ₹2,163 crore in March 2025.
10. Bullish Technical Setup Supports Upside Potential
The stock is currently forming a Cup with Handle pattern and trading at
₹121.63, offering a compelling investment opportunity. Based on this
technical setup, the medium-term target is ₹152, implying an upside
potential of 25.26% over the next 9-12 months. Although it is trading below
its IPO level and well below its all-time high of ₹188.50, the combination of
strong fundamentals and a bullish technical formation supports a positive
outlook for medium term investors.

Conclusion

In conclusion, Bajaj Housing Finance Ltd. demonstrates strong business

fundamentals with consistent growth in revenue, net interest income, and
profitability over the years. The company has successfully expanded its loan
book, reflected in a compound annual growth rate (CAGR) of approximately 29%
in sales over five years, supported by solid net interest income growth of ~36%.
With no reliance on non-core income, Bajaj Housing Finance’s focus remains
firmly on its core housing finance operations, ensuring long-term sustainability
and resilience.

In conclusion, Bajaj Housing Finance Ltd. offers a compelling investment

opportunity, underpinned by strong fundamentals and favorable technical
indicators. Although the stock is currently trading below its IPO price and well
off its all-time high of ₹188.50, the ongoing Cup with Handle formation suggests
a potential upside of 25.26%, with a medium-term target of ₹152 over the next 9-
12 months. With a combination of solid financial performance and positive
technical outlook, Bajaj Housing Finance is poised for sustained growth, making
it an attractive proposition for medium term investors.

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Definition of Ratings

Ratings Expected Absolute Returns over 12-

18 Months

Buy More Than 10%

Hold Between 10% and -10%

Sell Less than -10%

Not Rated We have forward looking estimates

for the stock but we refrain from
assigning valuation and
recommendation

Under Review We will revisit our recommendation,

valuation and estimates on the stock
following recent events

No Stance We do not have any forward-looking

estimates, valuation or
recommendation for the stock

Other Disclosures

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Telephone no. / Mobile no. +91 9881493166

Email id - [email protected]

Name of the Grievances officer- CA. AASTHA AGRAWAL

Telephone no. / Mobile no. +91 9371193166

Email id - [email protected]

ANALYST CERTIFICATION: I, Nirmal Agrawal (B.COM, FCA) Research Analyst author and the
name subscribed to this report, hereby certify that all of the views expressed in this research
report accurately reflect my views about the subject security. I/ also certify that no part of
my compensation was, is, or will be directly or indirectly related to the specific
recommendation(s) or view(s) in this report

Please send your feedback to [email protected] or [email protected]

ANALYST

Nirmal Agrawal [email protected] +91 9881493166

(Sources: Charts and Financial Data from Screener.in and Tradingview.com)