The stock is currently sitting on gains of 140% since its listing against its issue price of Rs 70 per share.
Soon after its listing, the stock also earned its first ‘buy’ rating from the brokerage firm PhillipCapital with a target price of Rs 210, stating that the company is in a league of its own, with a focus on the ‘desirable’ sweet spot for many home loan aspirants – a ticket size of Rs 5mn. It addresses 65% of home-loan originations in India.
Additionally, the company is also focusing on Lease Rental Discounting, a high-yield segment that provides operating leverage with scale. In the next three years, it is likely to have a balance sheet of Rs 2 lakh crore and in the near-term, credit costs will remain benign. Phillip Capital values Bajaj Housing Finance at 6.5x Sep- 26 BV.
Despite the ups and downs faced by the stock in its first week after listing and its high valuations, analysts believe that the company is very typically supported by the heritage of the Bajaj Group and the wealth creation that has happened inside the group, the management quality, the integrity as well as the industry that it functions into.
“The company is growing at a compounded rate of growth of around 30%, which means even if today the stock is quoting at 7-7.5 times price to book value, at a 30% rate of growth, if one averages it out three years forward, this is basically valued at around 3.5 times,” explained Deven Choksey, Managing Director at DRChoksey FinServ.Deven Chowksey believes that if the market allows buying the stock at a lower level on any fall or any dip, that would be the right time to buy into the portfolio because though expensive, he recommends buying at a slight premium for a good quality stock in the portfolio.Also read: Vodafone Idea shares tumble 24% in 2 days, slip below Rs 10 mark
Meanwhile, Devang Mehta of Spark Private Wealth explained how the company is supported by its base being lower, the huge database that this company has, and the trust of the investors as well as the trust of the community who borrows from the company.
Mehta too, advised that the stock should be a hold for somebody who has bought an allotment and for somebody who wants to buy, this (dip) is a good opportunity for a great company.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
