Today, we recommend two Bajaj stocks, one from the automobile sector and another from the housing finance sector, recommended by the Trade Brains Portal, to buy for an upside potential of more than 33%. The Indian automobile industry is among the largest globally, fueled by rising disposable incomes, greater urbanization, and robust government backing for electric vehicles.
Meanwhile, the housing finance market, valued at Rs 33 lakh crore, is projected to grow at a CAGR of 15-16%, reaching Rs 77-81 lakh crore by FY2030, driven by solid fundamentals and government incentives. We also analyze the market’s performance on Wednesday to understand what may lie ahead for the stock indices in the coming days.
1. Bajaj Housing Finance Ltd
- CMP: ₹113
- Target price: ₹150
- Upside: 32.74%
- Time frame: 16-24 Months
To view the report for the stock mentioned above or explore other stock recommendations, click here
Why it’s recommended
Bajaj Housing Finance Limited (BHFL) is a non-deposit home finance company that started lending in 2017, which is registered with the National Housing Bank (NHB). As of June 30, 2025, Bajaj Finance has a significant 88.70% ownership in Bajaj Housing Finance. It has diversified offerings that include developer financing, lease rental discounting, house loans, and loans secured by real estate, with an emphasis on a low-risk, medium-return portfolio. As of Q1 FY26, BHFL operates in 217 branches expanding across 21 states & union territories. Additionally, 55.8% of BHFL’s AUM originates from the home loans category, followed by loans secured by real estate (10.5%), lease rental discounting (20.4%), developer finance (11.9%), and others (1.4%) in Q1FY26.
The company’s AUM increased from Rs 97,071 crore in Q1FY25 to Rs 120,420 crore in Q1FY26, registering a growth of 24% YoY. Disbursements grew by 22% YoY, from Rs 12,004 crore in Q1FY25 to Rs 14,651 crore in Q1FY26. Reduced operational expenditures: the OPEX-to-NTI ratio improved from 24.0% in FY24 to 21.2% in Q1FY26. Total income increased 21% YoY to Rs 2,493 crore, as of Q1FY26, whereas profit after tax stood at Rs 583 crore, a 21% growth.
The company has successfully decreased its OPEX ratio from 74.6% in FY18 to 21.2% in Q1 FY26. It has been improving its return ratios significantly over the last 5 years. ROE stood at 11.6%, up from 7.8% in FY21. Asset quality remains intact with an NPA of just 0.13%, with a comfortable provision coverage ratio of 56.3% as of Q1FY26. The company maintains a healthy and stable NIM of 4% as of Q1FY26.
Management gave guidance of 24-26% growth in AUM for the medium term. The OPEX ratio is expected to be further improved to 14-15%. GNPA is expected to remain stable at 40-60 bps. ROE is expected to further improve to 13-15%, as per medium-term guidance. As of Q1FY26, the leverage ratio stood at 5.4 times. As per guidance, it will reach 7-8 times in the medium term, and the debt-to-equity ratio was at 4.3 times as of Q1FY26. The company is planning to make significant investments in its Strategic Business Units (SBUs) and non-metro markets in FY26 to drive future growth.
Risk Factor
The housing finance industry has many players that operate in the affordable housing segment. The company might face the risk of margin compression and market share loss, as it may need to lower lending rates to stay competitive. The company also faces geographic concentration risk, as it is primarily concentrated in four states and the New Delhi region.
2. Bajaj Auto Ltd
- CMP: ₹ 8,177
- Target price: ₹ 10,200
- Upside: 24.7%
- Time frame: 12 Months
To view the report for the stock mentioned above or explore other stock recommendations, click here
Why it’s recommended
Bajaj Auto is a flagship company of the Bajaj Group, a 2W and 3W manufacturing company exporting to over 79 countries globally and anticipating over 20% growth from exports in the coming years. The company has 5 manufacturing plants across India with a total installed capacity of 7.1 million units annually. Bajaj Auto has a diversified product portfolio and a strong market presence overseas. It has popular brands in its portfolio like Pulsar, KTM, Triumph, Chetak, Dominar, and Avenger. Further, the company has forayed into the e-2W scooter space with the Chetak brand and is among the top 5 players within the industry.
Bajaj Auto is the 2nd largest player within the motorcycle business in India and India’s largest exporter of 2-wheelers. It received board approval to develop export capacity to 50,000+ units by FY26 for its Dominar brand. In FY25, they had a market share of 16.6% of motorcycle sales in India and a 46.3% share in the export market. They are also a dominant player in the ICE 3W segment, with a market share of 75.7% in FY25 and around 52.4% share in the ICE 3W goods carrier segment. The company is also the largest exporter of 3Ws from India.
The company has further plans for infusing capital of Rs 2,300 crore into Bajaj Auto Credit Limited by FY26. The company is committed to providing Rs 1,000 capex as part of the PLI scheme in a horizon of 5 years and will incur Rs 600-700 crore in FY25-26, mostly towards maintenance capex. The company has reported sales of 5,29,344 units for 2-wheelers and 1,05,464 units in the commercial vehicle segment in Q1 FY26, and July sales stood at 2,96,247 units for 2-wheelers and 69,753 units in the commercial vehicle segment. Standalone revenue stood at Rs 12,584 crores, up 6% YoY, driven by exports and premium motorcycles. Quarterly exports hit historical highs driven by double-digit volume-led growth across Africa, Latin America, and Asia. Quarterly commercial vehicle sales volume was more than 1,00,000 units for the 8th straight quarter, making the company a market leader in the 3W EV space in Q1FY26.
Risk factors
The auto industry is closely aligned with the macroeconomic situation of the country. Industry is susceptible to geopolitical concerns, such as tariffs levied by the Trump administration, which may lead to high costs and supply chain disruption. Other macro events like a decline in per capita income across economies, which will lower people’s purchasing power, shifting national demand and preferences, global inflation, and the availability of input materials may impact the industry. The 2W segment has become extremely competitive; players like Hero MotoCorp, Honda Motorcycles, Suzuki Motorcycle, and TVS Motors continue to launch new models to gain market share.
Market Recap August 6th, 2025
The Nifty 50 index opened at 24,641 on Wednesday, down by 8.55 points from Tuesday’s closing of 24,649.55. The index was volatile throughout the day and closed on a negative note at 24,574.2, down -75.35 points or -0.31%. It traded above the 200 EMA but below the 20, 50, and 100 EMAs in the daily time frame. Its RSI stood at 38.16, well below the overbought zone of 70. BSE Sensex also had a similar start, opening at 80,694.9, down by 15.1 points from the previous close of 80,710 levels. Sensex closed at 80,543.9, down -166.26 points or -0.21%.
On Wednesday, the majority of the sectoral indices ended red, except for the Nifty PSU Bank index and the Bank Nifty index. The Nifty PSU Bank Index ended the day at 6,889.05, up 40.40 points, or 0.59%. Major stocks like Union Bank of India, which rose 2.38%, Canara Bank Ltd., which increased 1.22%, and Bank of India, which increased 0.89% on Wednesday, all contributed to the index’s increase. Bank Nifty ended in green at 55,411, up by 50.90 points or 0.09%. Banking stocks, including Canara Bank, Federal Bank, State Bank of India, and Bank of Baroda, pulled up the index with their gains.
The Nifty Pharma Index was the major laggard, closing at 21,523.75, down -446.40 points, or -2%. Stocks including Divi’s Laboratories, Ajanta Pharma, Biocon, and Zydus Lifescience pulled the index down, which declined by more than -4%. The Nifty Healthcare Index was another big loser, closing at 14,223.35, down -258.20 points, or -1.8%. Healthcare stocks, including Divi’s Laboratories, Syngene International, and Biocon, dragged the index down, with a fall of more than 4% on Wednesday.
Asian markets were majorly positive, with Japan’s Nikkei 225 Index gaining 245.32 points, or 0.6%, to close at 40,794.86. Similarly, the Shanghai Composite Index closed at 3,633.99, gaining 16.4 points, or 0.45%. South Korea’s KOSPI Index was at 3,198.14, up 0.14 points. Hong Kong’s Hang Seng Index gained slightly by 8.1 points or 0.03%, to close at 24,910.63. The Shenzhen component index rose by 70.82 points or 0.64%, closing at 11,177.78. The US Dow Jones Futures were trading at 44,349, up 113 points, or 0.26%, as of 4:28 p.m. IST.
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