Bajaj Housing Finance: Buy, sell or hold after Q2 results | Post-IPO update #Finance

the IP of Bajaj Housing Finance has left both sweet and SAR memories for investors sweet memories for those who got the allotment as the stock more than doubled on listing as against

the issue price of 70 rupees per share the stock listed at 150 rupees hit the upper circuit and closed at 165 the next day also it hit the upper circuit and closed at 181 so by extension are memories for those who could not get an allotment and hence miss their initial 160% gain in now such

investors probably didn’t buy the stock even after listing as it had already run up a lot now Bajaj Housing Finance has released its first quarterly earnings since listing the market

and stock Euphoria have also cooled off so can one buy Bajaj Housing Finance stock now or if you had bought baj Housing #1a73e8; text-decoration: none;">Finance pre or post listing and are still holding it should you continue to do so we will try to find out answer in this CashNews.co hello and welcome to it money’s YouTube channel today we will analyze Bajaj Housing

style="font-weight: bold; color: #1a73e8; text-decoration: none;">Finance after its September 16th listing we had analyzed Bajaj housing’s IPO as well the link to that CashNews.co is in the description so do watch it to get the complete picture by the way did you know that you can get all

financial data on Bajaj Housing Finance and any other listed company on ET money through our newly launched stock Discovery feature you just need to type the company name in the search bar

and hit enter do give it a try okay let’s begin by quickly checking Bajaj housing Finances stock M since its listing the baj housing IPO was subscribed over 67 times

overall as against the IPO size of 6560 crores bids worth around 3.24 lakh CR were received the IPO received over 89 lakh applications the highest number ever at that time this record has been broken by War energies whose ipu has received over 97 lakh applications now the baj housing stock listed

at a premium of 114% to its issue price it h the upper circuit on the listing day and the next day that’s when it also closed at its highest two at 182 rupees after that it started to cool off and correct it fell to its lowest level of 136 on 7th October oob and is currently hovering around

that now as of October 23 2024 it’s down about 9% from its listing price from its highest point it has corrected by over 25% okay let’s now examine Bajaj housing’s latest quarter performance for ease of comprehension we have divided into three parts Portfolio

metrics Profitability metrics and asset quality metrics let’s start with the Portfolio metrics the first metric here is Assets under management in Q2 Bajaj housings a crossed 1 L CR for the first time on a year-on-year basis that’s a

change of 26% at the same time the company’s Loan Assets or Assets receivable grow by 27% to about 90,000 crores now if you are wondering about the difference between the two well AUM or Assets under management is the market

value of the Assets a company manages on on behalf of its clients Loan Assets or Assets receivable are the company’s actual Loan book next let’s check the Portfolio composition the

major share of the company’s Portfolio is Home Loans though it has fallen year- on-ear by 120 basis points so has the share of the Loan against property on the other hand the share of lease rental discounting and developer financing has ined

up now lease renting discount is a Loan offered on rent generating properties as long as Loan disbursement is concerned it has fallen year on year by about 140 crores so overall while the rise in em and Loan book is good the fall in dispersements

has been concerning next let’s look at the company’s Profitability metrics the first one is interest Income for Finance

companies it’s the chief Income component and it is similar to operating Revenues in non-Finance companies now the interest

Income has grown 25% % year- on-ear from about 1,800 crores to about 2200 crores the net interest Income or nii grew by 133% from 632 crores to 7133 crores the nii is obtained after deducting interest expenses from the interest Income now interest

expense is the interest the Finance company pays on its borrowings since Bajaj housing is a non-de deposit taking nbfc it raises funds from Banks Money

Market and the National Housing Bank the next metric is Profit after tax the company’s Profit grew to 546 cror from 451 CR a jump of 21% next comes net interest margin or nim nim is like operating margin for

href="https://cashnews.co/finance" style="font-weight: bold; color: #1a73e8; text-decoration: none;">Finance companies and is hence an important metric to track the company’s Nim contracted by 30 basis points year on- year and that’s the reason for the large difference

between interest Income growth which was about 25% and nii growth which was much lower at 13% year on-ear however the margin was higher than that in the last two quarters by 30 and 20 basis points respectively now one culprit for the year- on-ear contraction in NS is a higher cost

of funds which jump 28 basis points year on year the third and the last number we will discuss is return on Equity or Roe Roe is a crucial Profitability metric as well it tells us what returns a company made on the Net Worth or shareholders fund

the company’s Roe also fell from over 16% to 133% year on year so overall while the rise in the interest Income is positive the proportional increase in niia is missing due to the contraction in margins the RO has also Fallen too possibly due to the expansion in the

Equity Base Post the IPO next let’s check the asset quality metrics baj housing Finances greatest strength has its asset quality which is among the

best in the industry now cross npas are at 29% a slight jump from 24% a year ago The NPS post provisioning are called net npas and these have increased from 9% to1 12% in Q2 the company registered Loan losses and Provisions of 5 crores which is much less than the 18 CR a year ago

overall there’s a slight deteriation in asset quality metrics but given the industry figures this continue to be among the best now in the IPO analysis of baj housing we compared the company with three of its pairs LC housing pnb housing and Canin Homes at the time we did this analysis LSC

Housing Finance had yet to declare its second quarter results but pnb Housing none;">Finance and Canin homes have declared their results so let’s compare some critical metrics of Bajaj housing with those of pnb Housing and Canin homes to put the forers numbers in perspective on your screen is the comparison of key financials of Bajaj Housing

href="https://cashnews.co/finance" style="font-weight: bold; color: #1a73e8; text-decoration: none;">Finance pnb Housing Finance and Canin homes for the second quarter in terms of

Loan book interest Income and nii growth Bajaj housing is ahead of its paer by a wide margin however in terms of Pat growth it is trailing behind them both its competitors and IMS have expanded slightly year on-ear as have their Roes not so with Bajaj

href="https://cashnews.co/finance" style="font-weight: bold; color: #1a73e8; text-decoration: none;">Finance who n and Ro have contracted now pnb housing’s npas have gone down by 54 basis points however in absolute terms pnb housings npas are much higher at 1.24% than Bajaj housings 29%

overall Bajaj Housing Finance results are mixed when compared with those of its peers next let’s take a look at the Valuations of Bajaj Housing

href="https://cashnews.co/finance" style="font-weight: bold; color: #1a73e8; text-decoration: none;">Finance now Post Its listing now the time of its IPO baj housing was more expensive than its spe by a wide margin its Valuations have settled as a stock has fallen since from

the peig of 8.5 on September 17 2024 the PB has fallen to 5.8 on October 24th 2024 despite this the stock is even more expensive than its peer than it was at the time of its IPO so as an investor should you buy baj Housing #1a73e8; text-decoration: none;">Finance Post Its quarter two results let’s try to answer this question and conclude the CashNews.co as mentioned in the IPO CashNews.co rapid growth good asset quality and the backing of the baj group are the key strengths of Bajaj Housing

href="https://cashnews.co/finance" style="font-weight: bold; color: #1a73e8; text-decoration: none;">Finance the main challenge is high competition not just from the peers discussed in the CashNews.co but also from other housing bold; color: #1a73e8; text-decoration: none;">Finance companies nbfcs and Banks the company’s first quarterly results since listing are a mixed bag while the company remains on the growth path it will need to arrest the fall in its NS and restore them to the previous Glory it

also needs to improve its dispersements the stock has corrected since listing and the Valuations have cooled off but as compared to its peers they continue to be very high this can keep the stock price in check for the foreseeable future so given all this what do you think about

this stock is it a buy or a hold or a sell do let us know in the comment section and with this we have come to the end of this CashNews.co I hope you found this CashNews.co useful and if you did please don’t forget to share it with your friends and family I’ll be back soon with another

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