Deven Choksey Research has reiterated a BUY stance on Bajaj Housing Finance Ltd. with a target price of Rs 109, implying an upside of about 23% from the current market price of Rs 88. The brokerage’s Q1FY27 preview points to strong asset growth, resilient disbursement momentum, and only a temporary pressure point in funding costs, even as sequential profitability softens.

What the preview says

Bajaj Housing Finance’s provisional Q1FY27 update showed AUM at Rs 1,49,610 crore, up 24.2% year on year and 6.3% quarter on quarter, while gross disbursements rose 33.1% year on year to Rs 19,500 crore. Loan assets on-book climbed to Rs 1,31,150 crore, reinforcing the view that the company continues to scale at a brisk pace.

The note argues that growth remained ahead of the 21% to 23% band management had guided for FY26, which suggests the lending engine is still running above conservative expectations.

Earnings under pressure

The caution in the report comes from margins rather than demand. Deven Choksey estimates Q1FY27 net interest income at Rs 906 crore, down 4.1% quarter on quarter but up 2.1% year on year, because borrowings rose faster than interest-earning assets as disbursements accelerated.

It also estimates PPOP at Rs 881 crore, down 4.3% quarter on quarter, and PAT at Rs 635 crore, down 5.1% quarter on quarter but up 8.9% year on year. In plain terms, the business is still expanding, but the near-term earnings bridge is being narrowed by a funding catch-up.

Why margins slipped

The report highlights a fresh NCD tranche priced at 7.53% and allotted between July 1 and July 7 for Rs 1,501 crore, which came at a premium to the company’s blended cost of funds of 7.30% in Q4FY26. Based on that, the brokerage models a quarterly cost of funds of 7.35% versus a yield on advances of 8.85%.

Its view is that this is a transitory adjustment, not a structural deterioration in liabilities. That distinction matters because it suggests the pressure on NII may be temporary rather than a lasting erosion of the franchise’s economics.

Levels and targets

The report’s most actionable market level is clear: CMP Rs 88, target price Rs 109, and implied upside of about 23%. It also notes the 52-week range at Rs 124 on the high side and Rs 72 on the low side, which places the stock closer to the lower end of its recent band than its peak.
For investors, the implied message is that the stock still offers room to rerate if growth stays robust and funding costs stabilize.

Key risks to watch

Deven Choksey flags four monitorables that could shape the next leg of the stock’s performance. These include FCNR-related system liquidity and its effect on HFC funding costs, Sambhav disbursement momentum versus the Rs 600 crore-plus monthly target, possible promoter stake sales by Bajaj Finance to meet SEBI’s 75% minimum public shareholding requirement, and the trajectory of leverage and Stage 2 PCR versus Q4FY26.

These are not trivial variables. They can influence both near-term sentiment and the market’s confidence in the durability of growth.

Financial snapshot

The financial tables in the report show FY26A net interest income at Rs 3,752 million, PPOP at Rs 3,533 million, net profit at Rs 2,560 million, and EPS at 3.07. Holdings data also shows promoters at 86.70% as of Mar-26, with public shareholding rising to 11.10%.

Reading the call

The brokerage’s tone is positive, but not blindly euphoric. It is effectively saying that Bajaj Housing Finance is still expanding at a healthy clip, while the earnings wobble in Q1FY27 looks more like a funding-lag issue than a business-model problem.

For investors, the stock appears positioned as a growth-led housing finance story with near-term margin noise and a clear upside case if execution remains intact. On the report’s own framework, the call remains BUY.