From Rs 150 to Rs 76: Holding Bajaj Housing Finance since IPO? Opportunity or trap — JM Financial explains

Shares of Bajaj Housing Finance remained under pressure on Friday. The stock extended losses and hit a fresh all-time low. Weak sentiment and sustained selling continue to weigh.

Stock falls to record low, close to IPO price

The stock fell nearly 4 per cent during the session. It touched Rs 76.29 on the NSE. By 2:28 pm, it traded at Rs 75.95, down over 4 per cent.

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The fall has brought the stock close to its issue price of Rs 70. It now trades less than 10 per cent above IPO levels.

Listing gains wiped out, sharp fall from peak

The correction has erased over 85 per cent of listing gains. The stock had listed at Rs 150. This was a 114 per cent premium over the issue price.

From its record high of Rs 188.50 in September 2024, the stock has fallen about 60 per cent. The decline has been steady with no strong rebound.

Trend remains weak in near term

The stock continues to show weakness. It has fallen over 4 per cent in the last five sessions. It is down more than 12 per cent in one month.

Selling pressure remains high. There is limited buying support at current levels.

Q3 performance mixed

Bajaj Housing Finance, a subsidiary of Bajaj Finance, reported mixed numbers for Q3FY26.

Net profit fell 6 per cent year-on-year to Rs 4,066 crore. Total income rose over 15 per cent to Rs 21,215 crore. Assets under management stood at Rs 4,88,477 crore.

Brokerage view: “best-in-class metrics”, but limited upside

JM Financial has initiated coverage with an ‘Add’ rating and a target price of Rs 88.

The brokerage said the company has “best-in-class metrics”. However, it added that “rich valuation… implies limited upside potential in the near term”.

It noted that despite rising competition and higher NBFC yields, the company is “well positioned to protect its NIM” due to strong parentage and refinancing of high-cost borrowings.

Growth outlook remains strong

JM Financial expects earnings to grow at around 20 per cent CAGR over FY26–FY28.

It said growth will be driven by a “diverse portfolio”, stable margins of around 2.9 per cent, and improving cost efficiency.

“This robust strategy would support a consistent 2 per cent RoA and drive RoE by 13–14 per cent till FY28E,” the brokerage said.

Key risks flagged by brokerage

JM Financial highlighted multiple risks.

It warned that “aggressive stance of PSU banks” could pressure growth and margins. It also flagged high geographical concentration, with around 85 per cent of AUM in a few states and regions.

The brokerage added that a “broad-based economic slowdown” could impact growth. It also pointed to regulatory requirements for promoter stake reduction.

On the asset side, it cautioned that rising exposure to lease rental discounting may pose risks if rental incomes weaken.

Outlook

As per JM Financial, the business fundamentals remain strong. Asset quality and growth visibility are intact.

However, the stock is under pressure. Valuation concerns and weak sentiment continue to dominate. Near-term movement may remain volatile unless earnings or valuations offer comfort.