Bajaj Housing (BAJAJHFL)

FairStock Score: 61/100 — STEADY

Score breakdown: P/E: 1/3 · ROCE: 0/2 · Growth: 2/2 · Dividend: 0/1

Key Financials

Strengths

• Promoter holding of 86.70% provides strong alignment and Bajaj group backing.
• Healthy growth momentum with sales up 18.76% and profit up 26.58%.
• Latest quarter net margin of ~23% shows strong operational profitability.
• PEG of 0.38 suggests the growth rate may partly justify the P/E if sustained.
• Piotroski F-Score of 7/9 points to solid fundamentals and improving financial position.

Concerns

• Valuation is rich: P/E 29.15 and P/B 3.77 versus ROE of 12.42% leave little margin of safety.
• Negative free cash flow of -17,872 crore and debt/equity of 4.11 indicate heavy leverage and capital consumption.
• Graham Number of ₹45.42 is far below the current price of ₹90.16, implying significant overvaluation by conservative measures.
• Zero dividend yield means investors depend solely on capital appreciation, with no cushion from income.

AI Analysis

When I look at Bajaj Housing, I try to ignore the noise and ask what this business earns on the capital shareholders have put in. The return on equity is 12.42%, which is respectable but hardly spectacular. Yet the market is asking me to pay 3.77 times book value and 29.15 times earnings. That is a steep price for a lender whose debt-to-equity is already 4.11. Borrowing to grow is normal for a housing finance company, but negative free cash flow of -17,872 crore makes me uncomfortable. A business that consumes cash while growing may need repeated capital, and the Altman Z-Score of 1.03 does little to reassure me. The profit growth of 26.58% and sales growth of 18.76% are encouraging, and the latest quarter shows a healthy net margin of about 23%. The PEG ratio of 0.38 suggests the growth is not fully reflected, but Graham taught me to value the margin of safety above the story. Here the Graham Number of 45.42 is roughly half the current price, and the stated margin of safety is deeply negative. I also see no dividend yield, so the only return is capital gains. The 86.70% promoter holding is good for alignment, but low free float can create volatility. EV/EBITDA of 842 is meaningless for a lender, so I focus on book value, leverage, and asset quality. This is a fast grower, but at this price, I would wait for a better bargain.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer