Hello everyone, how are you all, and what’s the news?
Today, I want to talk about Bajaj Housing Finance. Here’s some exciting information! According to a booking report, the share of Bajaj Housing Finance is expected to triple. Now, this isn’t coming from me, but from the report, and I’m here to explain things and not give buy or sell recommendations. I’ve noticed you all enjoy the insights I share about Bajaj Housing Finance, so let’s dive into the details.
What’s the Story Behind Bajaj Housing Finance?
First of all, let me emphasize that my primary effort is to help you understand and avoid traps when it comes to this stock. If you’re new to the channel, please subscribe and hit the bell icon for regular updates. Now, let’s look at the new report from Fap Capital. They have set a new target for the stock. The report predicts a short-term growth with the price likely reaching Rs. 27, and a potential target of Rs. 10 in the short term. Currently, the stock is at Rs. 180, which is quite impressive.
What Are the Reasons Behind This Growth?
The report outlines several reasons for this expected growth. Let’s break it down step by step:
- Average home loan customers in India typically have a salary of Rs. 4 million, which gives Bajaj Housing Finance significant pricing power in the major markets and provides a competitive advantage.
- Their home loans are priced at around Rs. 40 for existing BAF clients and can go up to Rs. 70. This shows the strength of their lending.
- If you’re giving a loan against property, their financials remain robust. According to the report, as the size of their operations grows, their growth is at a completely different level, and their borrowing cost is much better compared to Ken Fin Home.
Simple Explanation
Let me put it in simpler terms: Bajaj Housing Finance offers loan tickets of Rs. 50 lakh, making it an excellent option for many home loan seekers. 65% of home loan originators in India are covered by Bajaj Housing Finance. Their increased focus on lease rental discounting is a positive development.
In the next 3 years, it’s projected that their balance sheet will reach Rs. 2 lakh crore, and the company’s Return on Equity (ROE) is expected to exceed 12%.
My Advice on Investing in Bajaj Housing Finance
Now, while all these projections sound great, I must ask you to tread cautiously. The share price has been rising, and I mentioned this in my previous article as well. If you haven’t seen it, do check it out. One key strategy I recommend is using a trailing stop loss. For example, if the stock is currently at Rs. 180, set your stop loss at Rs. 160. If the price goes up to Rs. 200, move your stop loss to Rs. 180. If it reaches Rs. 220, then adjust your stop loss to Rs. 200. This will help secure your profits as the stock rallies.
If you’re thinking from an investment perspective, it’s a good idea to have a 3-5 year outlook. The market will fluctuate, but with a long-term vision, you’ll be in a better position to weather those ups and downs.
Chart Patterns and Trading Opportunities
If you’re into trading, pay close attention to the 15-minute chart. Right now, the market appears to be moving sideways, so there isn’t much opportunity for trading until we see a breakout in the chart pattern. This is crucial because until the pattern is clear, you won’t get the chance to make informed trading decisions. Once you do, you can set your stop loss and targets accordingly.
Be aware of the FOMO (Fear of Missing Out). Some of you may feel like you missed out on the IPO, but trust me, there will be many more shares in the future that can offer similar returns.
Booking Reports and Valuation
Keep in mind that booking reports are constantly being released, and they can drive positive or negative sentiment in the market. If a negative report is published, the shares could drop. One point to note is that Bajaj Housing Finance is now trading at a price-to-book value ratio of over six times, which makes it very expensive compared to its peers.
So, while everything looks positive, it’s always essential to consider the valuation before jumping in.
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