Bajaj Housing Finance Shares Surge 6% Following 21% YoY Profit Jump in Q3
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Key Highlights:
– Bajaj Housing Finance reported a remarkable 21% year-on-year (YoY) increase in net profit, reaching Rs 665 crore in Q3FY26, up from Rs 548 crore in the same period last year.
– The company’s Assets Under Management (AUM), reflecting the total loans managed, surged 23% YoY, now totaling Rs 1.33 lakh crore.
– Net interest income (NII) saw a 19% growth, climbing to Rs 963 crore from Rs 806 crore in Q3FY25.
Detailed Insights:
1. Strong Financial Performance:
– Bajaj Housing Finance’s net total income rose by 24% YoY, reaching Rs 1,153 crore.
– Operating expenses have decreased slightly, now comprising 19% of net total income, down from 20% last year.
2. Assets Under Management (AUM) Growth:
– AUM increased from Rs 1.07 lakh crore to Rs 1.33 lakh crore, indicating robust loan portfolio expansion.
– Loan assets specifically grew significantly, rising to Rs 1.17 lakh crore, up from Rs 95,570 crore.
3. Asset Quality Remains Strong:
– Loan losses and provisions for Q3FY26 were Rs 56 crore, compared to Rs 35 crore the previous year.
– Despite this rise, asset quality is robust with Gross Non-Performing Assets (NPA) at 0.27% and Net NPA at 0.11%, showing improvement from 0.29% and 0.13% last year, respectively.
– The capital adequacy ratio stands at a robust 23.15%, ensuring solid financial health.
4. Credit Ratings:
– Bajaj Housing Finance maintains strong credit ratings, receiving AAA/Stable for long-term debt and A1+ for short-term debt from CRISIL and India Ratings.
5. Market Reaction and Technical Analysis:
– Shares saw a notable rise of 5.65%, hitting an intraday high of Rs 94.77.
– However, technical indicators present a cautious outlook, with the stock trading below 6 out of 8 simple moving averages (SMAs). The 14-day RSI is at 39.2, suggesting a balanced market position of neither overbought nor oversold.
Conclusion:
Bajaj Housing Finance’s impressive earnings, significant growth in AUM, and maintained asset quality are building investor confidence. Despite this strong performance, technical indicators indicate some short-term caution for potential investors. The company’s ability to adapt to changing market conditions while expanding its presence bodes well for its future prospects.
(Disclaimer: The recommendations and views expressed in this article are those of the authors and do not necessarily reflect the views of The Economic Times.)