Bajaj Housing Finance, along with Mobikwik and Ather Energy, experienced a significant surge in their stock prices following the announcement of their Q3 results for the fiscal year 2026. This uptick comes as Indian markets exhibit resilience, bolstered by the recent trade agreement between India and the USA, which is expected to enhance market confidence and attract foreign investment. The shares of Bajaj Housing Finance, a key player in India's financial sector, surged nearly 6% to reach Rs 94.77 per share, marking its highest value in nearly a month.
In its report released on February 2, Bajaj Housing Finance declared a net profit of Rs 664.89 crore for Q3 FY26, reflecting a robust 21% year-on-year increase from Rs 548.02 crore in the same quarter last year. This positive financial trajectory is further underscored by a 19% rise in net interest income, which reached Rs 963 crore, up from Rs 806 crore in Q3 FY25. Notably, the company has also improved its asset quality with a gross non-performing asset (NPA) ratio of 0.27% and a net NPA ratio of 0.11%, both of which have shown improvement from the previous year.
Despite these encouraging results, Motilal Oswal has issued a 'Neutral' rating for Bajaj Housing Finance, setting a target price of Rs 100 per share, suggesting an 11.5% upside potential from its previous closing rate. Analysts have pointed out that the company faces persistent pricing pressure within the prime and super-prime segments. However, they believe the management's strategy will continue to enhance profitability, supported by a robust Asset Under Management (AUM) growth rate of 23% projected from FY25 to FY28.
While Bajaj Housing Finance is poised for substantial growth, the increasing competition from public sector banks and a potential rise in borrower exits may necessitate a reduction in lending rates, possibly impacting the company's net interest income (NTI). Going forward, the focus will be on how these financial institutions adapt to these market dynamics and maintain their growth trajectories amidst evolving challenges.