Bajaj Housing Finance shares plunged 6%; what's next for this HFC stock?

Bajaj Housing Finance Ltd shares resumed fall on Thursday after a single-day halt. The stock slumped 6.08 per cent to settle at Rs 132.80. It logged high trading volume on BSE as around 51.08 lakh shares changed hands today. The figure was higher than the two-week average volume of 13.17 lakh shares. Turnover on the counter came at Rs 68.47 crore, commanding a market capitalisation (m-cap) of Rs 1,10,597.79 crore.

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.

"Investors can add Bajaj Housing from a medium- to long-term view, given the company's strong pedigree and earnings visibility. The stock is in a consolidation phase after hitting a record high of Rs 188. 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," said Kranthi Bathini, Director of Equity Strategy at WealthMills Securities. The RBI kept 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), potentially starting in February.

Technically, Bajaj Housing's counter looked slightly 'bearish' on the charts. Support could be seen in the Rs 125-130 range. Resistance may be found above Rs 138 level.

"The stock is likely to slip towards its lifetime lows of Rs 125 subzones. The technical structure seems a bit bearish, with support lying around the Rs 128-125 zone, and any breakdown could potentially drag it lower. On the higher end, Rs 138-140 is anticipated to act as an intermediate hurdle, followed by Rs 147. A decisive breach above Rs 147 can only trigger further upside," said Osho Krishan, Senior Research Analyst - Technical & Derivatives at Angel One.

"Support will be at Rs 130 and resistance at Rs 140. A decisive move above Rs 140 level may trigger a further upside towards Rs 145. The expected trading range will be between Rs 130 Rs 145 for the short term," said Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi.

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.