Bajaj Housing Finance Limited (BHFL), a leading name in India’s housing finance sector, continues to make waves with its impressive Q1 FY26 performance. As a wholly-owned subsidiary of Bajaj Finance Limited, BHFL has solidified its position as the second-largest housing finance company in India, showcasing robust financials and a promising outlook for investors. This article dives deep into the latest Q1 FY26 results, share price movements, and key updates, providing a comprehensive analysis for investors and market enthusiasts.
Bajaj Housing Finance Q1 FY26 Performance Overview
Bajaj Housing Finance delivered a stellar performance in the first quarter of the fiscal year 2026 (April–June 2025), reinforcing its reputation as a powerhouse in the non-banking financial company (NBFC) sector. The company reported significant growth in key financial metrics, driven by strong loan disbursements and an expanding asset base. Let’s break down the highlights.
Record-Breaking Loan Disbursements
BHFL reported gross disbursements of ₹14,640 crore in Q1 FY26, a remarkable 21.96% increase from ₹12,004 crore in the same period last year. This surge reflects robust demand for housing loans, loans against property, and lease rental discounting services. The company’s ability to cater to both individual and corporate clients has fueled this growth, positioning it as a market leader in the housing finance ecosystem.
Assets Under Management (AUM) Surge
The company’s Assets Under Management (AUM) grew by an impressive 24% year-on-year, reaching ₹1.20 lakh crore as of June 30, 2025. This growth underscores BHFL’s strong market position and its ability to scale operations efficiently. With the second-highest AUM per branch and employee among large housing finance companies, BHFL continues to optimize its operational efficiency.
Profit After Tax (PAT) Growth
Bajaj Housing Finance’s Profit After Tax (PAT) for Q1 FY26 is estimated to be in the range of ₹574–584 crore, reflecting a year-on-year growth of 19–21%. This marks a significant improvement from ₹483 crore in Q1 FY25, driven by healthy total income and controlled expenses. Analysts from Kotak Institutional Equities project a PAT of approximately ₹584 crore, indicating a robust financial performance.
Net Interest Income (NII) Expansion
The Net Interest Income (NII) for Q1 FY26 is expected to rise by 24–28% year-on-year, reaching between ₹827 crore and ₹851 crore. This growth is attributed to the company’s ability to maintain a healthy net interest margin (NIM), despite a slight year-on-year dip to 3.43%. The sequential improvement in NIM by 2 basis points highlights BHFL’s prudent financial management.
Revenue Growth Trajectory
BHFL’s revenue for Q1 FY26 is projected to increase by 25–29% year-on-year, reaching approximately ₹2,209–2,448 crore. This consistent revenue growth, quarter after quarter, reflects the company’s strong operational performance and its ability to capitalize on India’s growing housing finance market.
Bajaj Housing Finance Share Price Trends
The share price of Bajaj Housing Finance has been a focal point for investors, especially following its high-profile IPO in September 2024. Let’s explore the latest share price movements and what they mean for investors.
Current Share Price and Market Cap
As of July 15, 2025, Bajaj Housing Finance’s share price on the NSE stood at ₹121.22, reflecting a modest 1.13% increase from the previous close of ₹119.86. The company’s market capitalization remains strong at approximately ₹1,01,004.56 crore, underscoring its status as a small-cap NBFC with significant growth potential.
Trading Volume and Delivery Data
In recent trading sessions, BHFL recorded a trading volume of around 30 lakh shares, with a trade value of approximately ₹36 crore. Notably, the delivery percentage stood at 63%, indicating strong buying interest and investor confidence in the stock’s long-term potential. Despite a minor correction in the trading session, the stock’s upper band reached ₹131, signaling positive momentum.
Analyst Ratings and Price Targets
Analyst sentiment towards Bajaj Housing Finance remains mixed, with 66.67% of analysts recommending a “SELL” rating and an average target price of ₹116.44. However, some analysts, such as Phillip Capital, remain optimistic, projecting a target price of ₹210, implying a 27% upside from earlier levels. This divergence reflects the stock’s high valuation, with a forward P/E ratio of 46.62 and a price-to-book (P/B) ratio of 5.06, compared to industry averages of 23 and 2.97, respectively.
Shareholding Pattern
The promoter holding in Bajaj Housing Finance stands at an impressive 88.7%, signaling strong confidence from the Bajaj Group. However, recent data from the June 2025 quarter indicates a slight reduction in promoter and institutional holdings. Foreign Institutional Investors (FIIs) and Domestic Institutional Investors (DIIs) have marginally reduced their stakes, while public shareholding has increased, reflecting broader retail investor participation.
Financial Health and Key Metrics
Bajaj Housing Finance’s financial health remains robust, supported by strong fundamentals and a diversified lending portfolio. Let’s examine the key metrics that define its performance.
Asset Quality and Non-Performing Assets (NPAs)
The company’s asset quality has remained stable, with gross non-performing assets (GNPA) marginally increasing to 0.29% in Q2 FY25 from 0.28% in Q1 FY25. Net NPAs rose slightly to 0.12% from 0.11%. Despite these minor upticks, BHFL’s asset quality remains among the best in the industry, reflecting its stringent credit assessment processes.
Capital Adequacy Ratio (CAR)
BHFL’s capital adequacy ratio stood at 28.98% as of September 30, 2024, a significant improvement from 22.64% a year earlier. This strong CAR provides the company with ample headroom to support future growth and absorb potential risks.
Return on Equity (ROE) and Return on Capital (ROC)
The company’s Return on Equity (ROE) stands at a healthy 13%, indicating efficient utilization of shareholder funds. The Return on Capital (ROC) also remains strong, further highlighting BHFL’s ability to generate value for investors.
Expense Management
BHFL has demonstrated disciplined expense management, with operating expenses constituting only 5.05% of its operating revenues in FY25. Interest expenses, while significant at 62.44% of operating revenues, are in line with industry norms for housing finance companies. The company’s provisions dropped significantly by 72% year-on-year to ₹5 crore in Q2 FY25, reflecting improved asset quality and risk management.
Strategic Initiatives and Market Position
Bajaj Housing Finance’s strong market position is underpinned by its strategic initiatives and diversified service offerings. Let’s explore how the company is driving growth.
Comprehensive Product Portfolio
BHFL offers a wide range of financial products, including housing loans, loans against property, lease rental discounting, and working capital loans for business expansion. This diversified portfolio caters to both retail and corporate clients, ensuring stable revenue streams and broad market reach.
Leadership in Housing Finance
Since commencing its mortgage operations in 2015, BHFL has emerged as the second-largest housing finance company in India. Its ability to achieve the second-highest loan disbursements and AUM per branch among large HFCs highlights its operational efficiency and market leadership.
Bond Issuance Plans
In June 2025, BHFL announced plans to raise ₹35 billion through the issuance of two-year and five-year bonds, with a greenshoe option of ₹15 billion. This move underscores the company’s proactive approach to capital management and its ability to tap into diverse funding sources to support growth.
Technology and Innovation
As a subsidiary of Bajaj Finance, BHFL leverages advanced technology to streamline operations and enhance customer experience. From digital loan applications to seamless loan disbursements, the company’s tech-driven approach ensures efficiency and scalability.
Challenges and Risks
While Bajaj Housing Finance’s performance is impressive, it faces certain challenges that investors should consider.
High Valuation Concerns
With a P/E ratio of 46.62 and a P/B ratio of 5.06, BHFL’s stock is trading at a premium compared to its peers. This high valuation has led to profit-booking pressure, as evidenced by a 5.13% drop in transactional activity over the past 30 days. Investors should weigh the stock’s growth potential against its elevated valuation.
Interest Rate Sensitivity
As a housing finance company, BHFL is sensitive to interest rate fluctuations. The company’s cost of funds rose to 7.92% in Q2 FY25 from 7.64% a year earlier, which could impact profitability if interest rates continue to rise.
Regulatory Challenges
The NBFC sector is subject to stringent regulatory oversight, and any changes in regulations could impact BHFL’s operations. Investors should monitor regulatory developments to assess potential risks.
Future Outlook and Dividend Expectations
Bajaj Housing Finance’s strong Q1 FY26 performance sets the stage for continued growth in the coming quarters. Analysts expect the company to maintain double-digit growth in net profit and revenue, driven by robust loan disbursements and a growing AUM. The company’s stable asset quality and strong capital adequacy ratio further enhance its growth prospects.
Potential Dividend Announcement
While BHFL has not paid dividends in recent years, its consistent profitability could pave the way for a dividend announcement in the future. Investors should watch for updates during the Q1 FY26 results announcement, scheduled for July 23, 2025. A dividend declaration could boost investor confidence and support share price appreciation.
Long-Term Growth Drivers
India’s housing finance market is poised for significant growth, driven by increasing urbanization, rising disposable incomes, and government initiatives like the Pradhan Mantri Awas Yojana (PMAY). BHFL is well-positioned to capitalize on these trends, given its strong market position and diversified product offerings.
Why Invest in Bajaj Housing Finance?
Bajaj Housing Finance offers a compelling investment opportunity for those seeking exposure to India’s growing housing finance sector. Here are some key reasons to consider BHFL:
- Strong Parentage: As a 100% subsidiary of Bajaj Finance, BHFL benefits from the financial expertise and brand equity of the Bajaj Group.
- Market Leadership: With the second-highest loan disbursements and AUM per branch, BHFL is a leader in the housing finance space.
- Robust Financials: Consistent revenue and profit growth, coupled with stable asset quality, make BHFL a financially sound investment.
- Growth Potential: The company’s focus on technology and diversified offerings positions it for sustained growth in a high-potential market.
- High Promoter Holding: The 88.7% promoter holding reflects strong confidence in the company’s long-term prospects.
How to Invest in Bajaj Housing Finance
Investing in Bajaj Housing Finance is straightforward and accessible through platforms like INDmoney. Here’s a step-by-step guide:
- Open an Investment Account: Download the INDmoney app and create a free INDstocks investment account.
- Search for BHFL: Use the ticker “BAJAJHFL” to check live share prices and market updates.
- Choose Your Investment: Decide whether to buy shares outright or set up a Systematic Investment Plan (SIP) for regular investments.
- Fund Your Account: Transfer funds to your INDstocks account via the app.
- Place Your Order: Select the number of shares or SIP amount and confirm your investment.
With real-time price updates and analyst insights, platforms like INDmoney make it easy to stay informed and invest in BHFL.
Conclusion
Bajaj Housing Finance’s Q1 FY26 results highlight its strong growth trajectory and market leadership in India’s housing finance sector. With a 21–24% increase in net profit, a 24% rise in AUM, and record-breaking loan disbursements, BHFL continues to deliver value for investors. While challenges like high valuations and interest rate sensitivity remain, the company’s robust fundamentals, diversified portfolio, and strategic initiatives make it a compelling investment opportunity.
Stay tuned for the Q1 FY26 results announcement on July 23, 2025, for further insights into BHFL’s performance and potential dividend updates. For investors seeking exposure to India’s booming housing finance market, Bajaj Housing Finance remains a stock to watch.