Bajaj Housing Finance shares hovering near all-time low levels; should you add?

Shares of Bajaj Housing Finance Ltd resumed fall on Thursday, pausing their one day climb. The stock slipped 1.02 per cent to settle at Rs 125.65. At this closing price, it was just 0.56 per cent away from an all-time low value of Rs 124.95, a level seen in the previous session (Tuesday). And, the scrip has slumped 33.33 per cent from its record high value of Rs 188.45, hit earlier this year on September 18.

On BSE, around 4.34 lakh shares changed hands today. The figure was lower than the two-week average volume of 20.12 lakh shares. Turnover on the counter came at Rs 5.46 crore, commanding a market capitalisation (m-cap) of Rs 1,04,643.16 crore.

Investors can add Bajaj Housing from a medium- to long-term view, given the company's strong pedigree and earnings visibility, said Kranthi Bathini, Director of Equity Strategy at WealthMills Securities. "The stock is in a consolidation phase after hitting a record high. Any rate cut announcement from the Reserve Bank of India (RBI) will help housing finance companies, including Bajaj Housing, to improve their NIMs (net interest margins) in the medium- to short-term," he further stated.

The RBI kept the key interest rate unchanged at 6.50 per cent due to "high inflation" for the 11th consecutive time. That said, a few brokerages strengthen the case for rate cuts in the coming year (2025), from February onwards likely.

In the September 2024 quarter (Q2 FY25), the company posted a 20.95 per cent year-on-year (YoY) surge in its net profit. During the said quarter, profit stood at Rs 545.60 crore as against Rs 451.11 crore in the year-ago period. In Q2 FY25, revenue from operations moved up 26.09 per cent to Rs 2,410.15 crore from Rs 1,911.49 crore in the corresponding period last year.

On technical setup, the counter looked 'weak' on charts. Any dip below the Rs 125 mark can induce more pain and the counter may slip towards Rs 118 level, said Ravi Singh, Senior Vice-President (Retail Research) at Religare Broking. Upside is capped at Rs 130 and fresh buying isn't advised at current levels, Singh added.

"Support will be Rs 120 and resistance Rs 130. A decisive move above Rs 130 level may trigger a further upside towards Rs 140. The expected trading range will be between Rs 120 and Rs 140 for the short term," said Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi.

The counter traded lower than the 5-day, 10-, 20-, 30-day and 50-day simple moving averages (SMAs). The scrip's 14-day relative strength index (RSI) came at 38.48. A level below 30 is defined as oversold while a value above 70 is considered overbought.

Bajaj Housing Finance -- a part of Bajaj Group -- is a non-deposit-taking housing finance company (HFC) registered with the National Housing Bank (NHB). As of September 2024, promoters held an 88.75 per cent stake in the Bajaj Group entity.