Are Bajaj Housing Finance Ltd latest results good or bad?

Bajaj Housing Finance Ltd's latest financial results for the quarter ended December 2025 reflect a complex operational landscape. The company reported a net profit of ₹664.89 crores, marking a 3.41% increase compared to the previous quarter. This growth, while positive, is a slowdown from the 10.23% growth seen in the prior quarter. Interest income for the same period reached ₹2,877.69 crores, which represents a 5.19% sequential growth and an 18.17% increase year-on-year, indicating a consistent upward trend in revenue generation. However, the company's profitability metrics present a more nuanced picture. The PAT margin decreased by 40 basis points to 23.10%, reflecting pressures from rising interest costs, which increased to ₹1,733.51 crores, up 4.56% from the previous quarter. This margin compression suggests challenges in maintaining profitability amidst escalating expenses. Bajaj Housing Finance's return on equity (ROE) stands at 11.15%, which is below the average of its peers in the housing finance sector. This raises concerns about the company's capital efficiency and overall profitability. Additionally, the company's balance sheet shows a significant increase in liabilities, with a debt-to-equity ratio of 4.44 times, indicating a highly leveraged structure. Despite these challenges, the company has demonstrated operational resilience with seven consecutive quarters of sequential growth in interest income, driven by an expanding loan book and market penetration. However, the market's response to these results has been muted, highlighting valuation concerns as the company trades at a premium compared to its peers. Overall, Bajaj Housing Finance's financial performance showcases solid operational fundamentals but is tempered by issues related to profitability margins and capital efficiency. The company has seen an adjustment in its evaluation, reflecting the ongoing complexities in its financial landscape.