Brokerage firm Ambit has initiated a ‘Sell’ rating on Bajaj Housing Finance, setting a target price of Rs 85, which indicates a 39% downside from the previous closing price of Rs 139.90 per share. This move comes amid concerns about the company’s valuation and market dynamics.In its report, Ambit highlighted that the current valuation implies an ask rate of approximately 2x the industry’s growth rate. The report underscores that the prime home loans segment is a mature industry, heavily dominated by established banks. As such, the competitive dynamics within this space are expected to weigh on loan growth and return on equity (RoE).While the firm noted that non-housing loans could potentially contribute positively to growth and RoE, they also entail higher risks that may become apparent during downturns in the real estate market.Ambit’s report points out that Bajaj Housing Finance’s current valuation stands at 5.2x FY26E book value, which represents a 104% premium over its peers….
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