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Bajaj Housing Finance Q4 FY26 Analysis: Record Earnings vs. Margin Pressure

Lesson 274/323 | Study Time: 20 Min

Course: Quarterly Result Updates & Analysis

Bajaj Housing Finance Q4 FY26 Analysis: Record Earnings vs. Margin Pressure

The Snapshot

Metric	Details
Company Name	Bajaj Housing Finance Limited (BHFL)
Current Market Price (CMP)	₹91
Market Cap	₹75,691 Cr
Sector	NBFC - Housing Finance
Quick Verdict	Core Portfolio Compounder - Superior asset quality offsets yield compression.

The 'Wow' Factor

Income Milestone: Total Income grew by ~16% YoY to reach ₹2,903 Cr, demonstrating strong disbursement momentum despite a competitive landscape.
Profit Resiliency: Despite industry-wide NIM pressure, PAT rose 14% YoY to ₹669 Cr, backed by disciplined credit costs.
Core Operating Strength (EBITDA/PPOP): Pre-provisioning Operating Profit (PPOP) surged to ₹921 Cr, a significant 23.6% YoY growth, reflecting strong operational efficiency.
AUM Growth: The total Assets Under Management crossed ₹1.40 Lakh Cr, growing at 23% YoY.
Asset Quality Benchmark: Gross NPA improved to 0.27% (from 0.29% last year), maintaining its status as the cleanest balance sheet in the segment.

Operational KPI Table

Key Performance Indicator	Q4 FY26	Q4 FY25	Status
AUM (₹ Cr)	1,40,706	1,14,684	🟢 Robust
GNPA (%)	0.27%	0.29%	🟢 Improving
NNPA (%)	0.11%	0.11%	🟡 Stable
NIM (%)	3.80%	4.00%	🔴 Compressing
ROE (Annualized)	12.30%	12.10%	🟢 Increasing

Financial Deep Dive (Consolidated)

Particulars (₹ Cr)	Q4 FY26	Q4 FY25	YoY Change
Total Revenue (Income)	2,903	2,504	+15.9%
Net Interest Income (NII)	945	823	+14.8%
EBITDA (PPOP)	921	750	+22.8%
PAT (Net Profit)	669	587	+14.0%

Cost vs. Efficiency:

The company’s focus on operating leverage is evident. While borrowing costs have risen due to the high-interest-rate environment, the ratio improved significantly. This efficiency drove a higher growth rate in EBITDA (PPOP) compared to the top-line revenue growth.

The Forward Curve

Management guidance for FY27 remains optimistic with an AUM growth target of 21-23%. We expect credit costs to remain low at 15-20 bps, with a gradual recovery in NIMs as the rate cycle eventually pivots.

Valuation Guardrails

P/E Ratio (TTM): ~31.0x (Sector Avg: 22x)
Price to Book: 3.58x
Verdict: Premium Valuation. The stock is trading at a significant premium to peers. While the high quality justifies a higher multiple, the current entry offers a limited "Margin of Safety."

Recent Shareholding Trends

FII/DII Stake: Stable with a slight upward bias in DII holding through recent mutual fund inclusions.
Pledge: 0% (Clean parentage structure under Bajaj Finance).

The Advisory Note

Strategic Outlook: BHFL remains the "Blue Chip" among HFCs. For long-term investors, the focus should be on their 23% AUM growth and best-in-class risk management.

Tactical Outlook: The stock has seen a correction from its 52-week highs. At ₹91, it is fairly valued for a 3-5 year horizon, but short-term volatility may persist if NIMs compress further.

Fairvalue: https://docs.google.com/spreadsheets/d/e/2PACX-1vQ0XEkW3UXcRdgIUeuY_R4LO0HkkNODym3xSQjnZQaQBDi7RKpFAdcW2SPZURFmfT3mmX3DxZBEr7FS/pubhtml?gid=190497733&single=true

Disclosure: This analysis is for educational and informational purposes only. We are SEBI registered investment Advisors.

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Piyush Patel

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