Bajaj Housing Finance Shares Slump Over 1% After Q4 Results: Should You Buy, Sell Or Hold?

The shares of Bajaj Housing Finance fell over 1% to hit an intra-day low of Rs 90.01 apiece on Tuesday after delivering a steady Q4FY26 performance.

The company's return on assets (RoA) and return on equity (RoE) stood at 2.2% and 12%, respectively, aligning with both management guidance and an eight-quarter average.

Brokerage house ICICI Securities maintained a "BUY" call with an unchanged target price (TP) of Rs 125, "valuing the stock at 4x FY27E P/B."

"While intensified competition in the prime housing segment continues to pressure NIM, resulting in a flat sequential profit after tax (PAT) of Rs 6.65 billion, management remains optimistic about maintaining a 2.0–2.2% RoA for FY27. Improved operational efficiencies and moderated credit costs are likely to offset near-term spread compression and support RoA," it said.

Also Read: US Visa Shock: Is This the End of the H-1B Dream for Indian Techies?

Bajaj Housing Finance Q4FY26 Result

Bajaj Housing Finance's asset under management (AUM) grew 23% year-on-year (YoY), with "stable profitability despite spread compression BHFL sustained its profitability profile despite intensifying competitive pressure in the prime housing segment, which continued to drive spreads lower."

BT-out rate remained high at 10%. However, AUM growth remained strong at 5% quarter-on-quarter (QoQ)/23% YoY, led by LRD (up 44% YoY) and LAP (24% YoY) in Q4FY26. Disbursements in Q4FY26 rose 6% QoQ / 23% YoY to INR 175bn, with monthly disbursements in Sambhav loans (affordable + near prime) increasing to INR 4.1-4.25bn, on track to achieve a >INR 6bn run rate in the next 12 months. RoA remained steady at 2.2%—in line with guidance for both Q4FY26 and FY26.

"This operational strength was bolstered by improved efficiency, as the cost-to-income ratio dropped by more than 200bps YoY.  Gross spread moderated by ~10bps QoQ to 1.7%, with a ~14bps QoQ reduction in portfolio yields to 8.9%, impacted by lower acquisition pricing and portfolio attrition of the higher rate book," it said.

Taking cognisance of lower incremental yields in home loans at 8.1-8.15% vs. FY26 yields at 8.5-8.6%, management expects further spread compression in FY27. While overall cost of borrowings moderated by 4bps QoQ to 7.3%, incremental CoB during Q4FY26 remains higher, especially for money market borrowings.

Bajaj Housing Finance Future Outlook And Guidance

• Management guided that Q1FY27 margins are expected to be broadly stable vs. Q4FY26; however, some NIM compression is anticipated in FY27 as lower-yielding loans replace higher-yield older loans.
• RoA is expected to trend at the upper end of the 2-2.2% guidance range despite yield compression, as lower credit costs and operational efficiency will likely benefit RoA.
• Management expects no further PLR cuts, as the marginal cost of borrowing is already higher and yields are at the lower end for the prime book.
• Management believes that once the macro environment is stable, then either money market rates will normalise or there will be a hike in the repo rate, which will help pass on rates to customers. 

As of 11:29 AM, the share price of Bajaj Housing Finance fell as much as 1.49% Rs 89.71 apiece.