Deven Choksey Research has initiated coverage on Bajaj Housing Finance Limited with a BUY call, setting a target price of Rs 107 against a current market price of Rs 85. The brokerage sees 26% upside, arguing that the stock deserves a premium valuation because of its rapid asset growth, industry-leading underwriting discipline, and unusually clean balance sheet. The report also highlights the company’s multi-product mortgage franchise, anchored by home loans and complemented by higher-yielding segments such as Loans Against Property, Lease Rental Discounting, Developer Finance, and the emerging Sambhav platform. In the broker’s view, the long runway in India’s underpenetrated mortgage market could keep the growth story intact for years.

Why the call matters

Bajaj Housing Finance stands out as a scale story wrapped inside a quality story. The research house argues that India’s mortgage market remains deeply underpenetrated, while BHFL has already built meaningful heft with AUM of Rs 1.41 lakh crore and strong traction across multiple lending verticals. That combination, according to the report, gives the company a rare mix of growth, resilience, and operating leverage.

The brokerage’s thesis is simple: BHFL is not merely expanding; it is expanding with control. Asset quality remains exceptionally tight, credit costs are subdued, and the company’s diversified liability franchise gives it room to compound without losing discipline. The report therefore frames the stock as a premium mortgage franchise rather than a plain-vanilla lender.

Valuation and levels

The report values the stock on a P/Adjusted Book basis and arrives at Rs 107 per share. That implies 26% upside from the current price of Rs 85, which is why the recommendation is BUY. For investors tracking technical or practical decision levels, the report effectively places Rs 85 as the reference price, Rs 107 as the near-term target, and the 52-week range of Rs 73 to Rs 128 as the broader trading band.

Investor levels: near-term support sits around Rs 85, secondary support is near Rs 73, while upside resistance is seen at Rs 107 in the brokerage’s base case and Rs 128 at the 52-week high.

Growth engine at work

BHFL’s growth is being driven by a broad mortgage demand cycle rather than a single temporary tailwind. The report notes that India’s mortgage-to-GDP ratio remains low compared with developed markets, leaving a long runway for formal housing finance. BHFL has already translated that macro opportunity into 23% year-on-year AUM growth in FY26, while maintaining an asset quality profile that many peers would envy.

The company’s home loan book is still the anchor, but the mix is shifting gradually toward higher-yield products. That matters because the lender can continue to scale while improving returns, rather than sacrificing profitability for volume. The report repeatedly argues that this is a franchise with both breadth and depth.

Sambhav could re-rate margins

One of the most interesting parts of the report is the Sambhav platform, BHFL’s push into near-prime and affordable housing. Deven Choksey Research says this vertical is strategically important because it expands the addressable market beyond the crowded prime mortgage segment. It also offers better economics, with yields meaningfully higher than standard home loans.

The brokerage points to early traction, including monthly disbursements of about Rs 410-425 crore and a management target of Rs 600 crore a month within 12 months. If that path holds, Sambhav could become a material driver of both AUM expansion and margin support over time. In the report’s framing, it is not just a growth lever; it is a yield lever.

Asset quality remains the moat

The most compelling argument in the report is that BHFL’s underwriting culture is unusually conservative. Gross NPAs and net NPAs are very low, the company has tightened provisioning coverage, and the lender has maintained a remarkably stable credit record through changing rate cycles. That gives the stock a credibility premium that is difficult for weaker peers to replicate.

The report also highlights that BHFL’s LRD book has sustained zero GNPA, while the developer finance book is being managed with milestone-linked disbursements and tight monitoring. Even where risk is structurally higher, the company appears to be controlling it with process rather than optimism. That is the kind of discipline that tends to matter most in a slowing credit environment.

What could go wrong

The risks are not trivial. The report flags pricing pressure from PSU banks, particularly in home loans, as a major competitive threat, along with balance-transfer attrition that remains elevated. It also warns that the Sambhav book has not yet been tested through a full credit cycle, which means future slippage there could hurt consolidated profitability.

Another constraint is regulatory: BHFL’s priority sector housing and individual housing loan ratios are close to the minimum thresholds, which can complicate growth in higher-yield products. In short, the stock offers quality, but that quality comes with tight operating rails. Investors should watch margin movement, mix shift, and credit performance closely.

Investor take

The research house’s stance is clear: BHFL is a premium mortgage franchise with room to grow, and the market may still be undervaluing the durability of its model. The target of Rs 107 is not built on exuberance; it is built on steady AUM growth, improving leverage, and a gradual recovery in normalized earnings power.

Bottom line: Deven Choksey Research sees Bajaj Housing Finance as a BUY with a target of Rs 107, and the core investment case rests on disciplined lending, strong growth visibility, and a long structural runway in Indian housing finance.