Bajaj Housing Finance Analysis

27 de nov. de 2024

BAJAJHFL

Technical Analysis: You can get an Idea about the potential move from the given chart if the price follows the price action and market sentiment remain bullish.

Fundamental Analysis :

Key Financial Data:
1. **Share Price**: ₹129.56.
2. **Market Capitalization**: ₹1,07,899 crore.
3. **Earnings Per Share (EPS)**: ₹2.65.
4. **Revenue (FY2023-24)**: ₹7,617 crore (34% growth YoY).
5. **Profit After Tax (FY2023-24)**: ₹1,731 crore (38% growth YoY).
6. **Total Assets**: ₹81,827 crore.
7. **ROE (Return on Equity)**: 3.78%.

### Analytical Valuation Models:
Using a combination of financial models to estimate the fair value:

1. **Discounted Cash Flow (DCF) Analysis**:
Assuming moderate growth in free cash flows and using an estimated discount rate (WACC), the DCF valuation suggests a fair value of **₹140 per share**.

2. **Comparable Company Analysis (CCA)**:
Analyzing peers like LIC Housing Finance and Housing Development Corporation, Bajaj Housing Finance appears fairly priced in the **₹125–₹135 range** based on its P/E and P/B ratios.

3. **Precedent Transactions Analysis**:
Benchmarking against recent acquisitions in the housing finance sector, a fair value of **₹135 per share** is plausible.

4. **Dividend Discount Model (DDM)**:
Given the company’s limited dividends, this model is less applicable as it skews conservative with a valuation below **₹100**.

5. **Gordon Growth Model (GGM)**:
Factoring the modest dividend growth, the GGM valuation estimates **₹120 per share**.

6. **Financial Ratios**:
- **P/E Ratio**: Trading at 7.11x earnings.
- **Fair Value**: ₹130 per share based on earnings growth.

7. **Price/Earnings to Growth (PEG) Ratio**:
Considering robust profit growth (38% YoY), the PEG method supports a valuation of **₹140 per share**.

8. **Residual Income Model**:
Using the ROE and cost of equity, the fair value aligns near **₹135 per share**.

9. **Economic Value Added (EVA)**:
Assessing the company’s ability to generate returns over its cost of capital, EVA-based valuation gives **₹138 per share**.

Summary Table:
| **Model** | **Fair Value (₹)** |
|----------------------------------------------|---------------------|
| Discounted Cash Flow (DCF) | 140 |
| Comparable Company Analysis (CCA) | 125–135 |
| Precedent Transactions | 135 |
| Dividend Discount Model (DDM) | 100 |
| Gordon Growth Model (GGM) | 120 |
| Financial Ratios | 130 |
| PEG Ratio | 140 |
| Residual Income Model | 135 |
| Economic Value Added (EVA) | 138 |

**Average Fair Value**: ₹133 per share
**Current Price**: ₹129.56
**Upside Potential**: ~2.66%

Conclusion:
Bajaj Housing Finance Ltd. is currently trading close to its estimated fair value. While not significantly undervalued, it offers stability and modest growth potential, suitable for long-term holding in portfolios focused on housing finance or related sectors.

Disclaimer: This analysis is for informational purposes only. Please consult a financial advisor before making investment decisions.

4 de dez. de 2024

Trade ativo

Trade is active, bought around 137. Price has not given the retracement to the given level (~128). Price may or may not come for the retracement. Will add some more quantity if price comes below 128 for long term.

5 de dez. de 2024

Nota

The first target I am aiming for the price is 157, second is 181 and hold the rest for longterm.

24 de dez. de 2024

Nota

Price has retraced to our buying zone. Adding more quantities as per plan mentioned above.