With a market capitalisation of ₹122,568 crores, Bajaj Holdings remains one of India's premier holding companies, serving as the primary investment vehicle for the Bajaj Group's diversified portfolio. The company holds strategic stakes in Bajaj Finserv, Bajaj Auto, and Maharashtra Scooters, positioning it as a key player in India's financial and automotive sectors. However, the third quarter results reveal underlying challenges in the standalone business that warrant closer examination.
| Quarter | Net Sales (₹ Cr) | QoQ Growth | Cons. Net Profit (₹ Cr) | YoY Growth | Operating Margin (Excl OI) |
|---|---|---|---|---|---|
| Dec'25 | 287.51 | -27.56% | 2,016.22 | +15.32% | 85.74% |
| Sep'25 | 396.87 | +22.24% | 1,559.02 | +8.54% | 89.05% |
| Jun'25 | 324.66 | +123.50% | 3,486.51 | +116.49% | 87.42% |
| Mar'25 | 145.26 | +14.98% | 1,725.49 | — | 71.02% |
| Dec'24 | 126.33 | -54.73% | 1,748.36 | — | 75.73% |
| Sep'24 | 279.07 | +108.63% | 1,436.36 | — | 83.44% |
| Jun'24 | 133.76 | — | 1,610.46 | — | 54.46% |
Financial Performance: Revenue Volatility Amid Investment Swings
The quarter's financial performance presents a tale of two narratives. On a standalone basis, net sales in Q3 FY26 declined 27.56% quarter-on-quarter to ₹287.51 crores, though they remained significantly higher on a year-on-year basis with 127.59% growth compared to ₹126.33 crores in Q3 FY25. This volatility reflects the inherent nature of investment income recognition, which can fluctuate substantially based on dividend receipts and realisation of investment gains.
The consolidated net profit of ₹2,016.22 crores showed resilience with 29.33% sequential growth, demonstrating the strength of the underlying portfolio companies. However, the standalone profit before tax of ₹2,084.06 crores in Q3 FY26, whilst appearing robust, masks the reality that much of this stems from mark-to-market gains and investment income rather than operational excellence. The operating margin excluding other income stood at 85.74% in Q3 FY26, down from 89.05% in the previous quarter, indicating some pressure on core operations.
The tax rate of 3.16% in Q3 FY26 appears exceptionally low, likely benefiting from dividend income exemptions and capital gains treatment. Employee costs remained stable at ₹10.17 crores, whilst the company maintained its lean operational structure with minimal interest costs of ₹0.20 crores. The half-yearly performance (H1 FY26) showed net sales of ₹684.38 crores, representing a remarkable 68.82% growth over the corresponding period last year, though this growth trajectory appears unsustainable given the lumpy nature of investment realisations.
Capital Efficiency: Weak Returns Despite Strong Balance Sheet
Despite maintaining a debt-free balance sheet with shareholder funds of ₹62,687.55 crores as of March 2025, Bajaj Holdings' return on equity remains underwhelming at 10.44% for the latest period and 10.79% on average. For a holding company with such a prestigious portfolio, these returns fall short of expectations and lag behind several peers in the sector. The return on capital employed (ROCE) of just 1.20% is particularly concerning, suggesting inefficient deployment of the substantial capital base.
The company's investment portfolio stood at ₹73,975.61 crores as of March 2025, up from ₹64,885.19 crores in the previous year, representing the bulk of total assets. Current assets declined sharply to ₹1,254.26 crores from ₹30,622.26 crores, primarily due to redeployment into long-term investments. Fixed assets remain minimal at ₹7.73 crores, consistent with the company's role as a pure-play holding entity with negligible operational infrastructure requirements.
Capital Efficiency Concern
Whilst Bajaj Holdings maintains a pristine balance sheet with zero debt and substantial investments, the ROE of 10.44% and ROCE of 1.20% indicate suboptimal capital efficiency. For a company managing a portfolio worth over ₹73,000 crores, these returns suggest either conservative investment strategies or challenges in extracting value from portfolio companies. The market appears to be pricing in these concerns, with the stock trading at a modest P/BV of 1.79x compared to peers commanding significantly higher multiples.
Investment Portfolio: The Bajaj Group Advantage
Bajaj Holdings' primary value proposition lies in its strategic holdings in three marquee Bajaj Group companies. The investment portfolio provides exposure to Bajaj Finserv (financial services), Bajaj Auto (automotive), and Maharashtra Scooters (two-wheelers), each a leader in its respective domain. This diversified exposure across financial services and manufacturing sectors offers investors a unique play on India's consumption and financial inclusion story.
The consolidated results reflect the strong operational performance of these underlying businesses. Bajaj Finserv's robust growth in insurance and lending, combined with Bajaj Auto's leadership in the two-wheeler and three-wheeler segments, continues to drive value creation at the portfolio level. However, the holding company structure inherently trades at a discount to net asset value (NAV), and this discount has widened as the stock declined 26.83% from its 52-week high.
| Company | P/E (TTM) | P/BV | ROE % | Debt to Equity | Dividend Yield |
|---|---|---|---|---|---|
| Bajaj Holdings | 17.11 | 1.79 | 10.79% | 0.00 | 0.85% |
| Bajaj Finserv | 32.40 | 4.22 | 12.74% | 5.13 | 0.05% |
| TVS Holdings | 19.41 | 5.57 | 16.77% | 5.31 | 0.61% |
| JSW Holdings | 139.86 | 0.60 | 0.84% | 0.00 | — |
| Choice International | 83.41 | 15.92 | 14.30% | 0.45 | — |
| Mahindra Scooters | 49.41 | 0.46 | 0.75% | 0.00 | 1.64% |
Peer Comparison: Valuation Discount Reflects Concerns
Compared to its peer group, Bajaj Holdings trades at a significant valuation discount. With a P/E ratio of 17.11x, it appears cheaper than Bajaj Finserv (32.40x) and most other holding companies, though this partly reflects the structural discount inherent in holding company structures. The price-to-book value of 1.79x is substantially lower than peers like TVS Holdings (5.57x) and Choice International (15.92x), suggesting the market is sceptical about the company's ability to unlock value from its investments.
The ROE of 10.79% positions Bajaj Holdings in the middle of the pack, trailing TVS Holdings (16.77%) and Choice International (14.30%) but ahead of JSW Holdings (0.84%) and Mahindra Scooters (0.75%). However, for a company with zero debt and a pristine balance sheet, these returns appear inadequate. The dividend yield of 0.85%, whilst higher than Bajaj Finserv's 0.05%, remains modest and reflects the company's preference for capital appreciation over income distribution.
Valuation Analysis: Fair Value, But Limited Upside
At the current price of ₹10,883.30, Bajaj Holdings trades at 17.11x trailing twelve-month earnings and 1.79x book value. The valuation grade has oscillated between "Very Expensive" and "Attractive" over the past two years, currently settling at "Very Expensive" since February 2024. This assessment appears harsh given the P/E multiple is below the industry average of 22x, suggesting the market is applying a holding company discount to reflect structural limitations.
The EV/EBITDA multiple of 143.77x appears extraordinarily high, but this metric is less relevant for holding companies where value derives from investments rather than operating cash flows. Similarly, the EV/Sales multiple of 121.03x reflects the minimal revenue base relative to the investment portfolio value. The more meaningful metric is the price-to-book ratio of 1.79x, which implies the market values the investment portfolio at approximately 79% premium to book value, though this likely understates the fair value of listed holdings.
Shareholding Pattern: Stable Promoter Base, Cautious Institutions
The shareholding pattern reveals a stable promoter holding of 51.46% that has remained unchanged for the past five quarters, demonstrating the controlling Bajaj family's long-term commitment. The promoter group comprises various family trusts and investment vehicles, with Jamnalal Sons Pvt Ltd holding the largest individual stake at 18.01%. This stable promoter base provides governance comfort and strategic continuity.
Foreign institutional investors (FIIs) have marginally reduced their stake from 10.56% in March 2025 to 10.26% in December 2025, a modest 0.30 percentage point decline over nine months. Mutual fund holdings have increased from 5.98% to 6.21% during the same period, suggesting some domestic institutional interest. However, insurance companies have reduced exposure from 1.17% to 0.69%, indicating concerns about near-term prospects. The non-institutional shareholding of 30.97% has remained relatively stable, providing a diversified shareholder base.
| Category | Dec'25 | Sep'25 | Jun'25 | Mar'25 | QoQ Change |
|---|---|---|---|---|---|
| Promoter | 51.46% | 51.46% | 51.46% | 51.46% | 0.00% |
| FII | 10.26% | 10.33% | 10.31% | 10.56% | -0.07% |
| Mutual Funds | 6.21% | 6.05% | 6.05% | 5.98% | +0.16% |
| Insurance | 0.69% | 0.88% | 1.12% | 1.14% | -0.19% |
| Other DII | 0.41% | 0.37% | 0.27% | 0.17% | +0.04% |
| Non-Institutional | 30.97% | 30.90% | 30.78% | 30.69% | +0.07% |
Stock Performance: Significant Underperformance Across Timeframes
The stock's recent performance has been disappointing across most timeframes. Over the past year, Bajaj Holdings has declined 7.35% whilst the Sensex gained 6.66%, resulting in a negative alpha of 14.01 percentage points. The six-month performance is particularly concerning, with the stock down 21.68% compared to the Sensex's 3.45% gain, translating to a 25.13 percentage point underperformance. The three-month decline of 9.87% against the Sensex's 0.43% gain further underscores the negative sentiment.
However, the longer-term picture remains more favourable. Over three years, the stock has delivered 80.32% returns compared to the Sensex's 37.76%, generating a positive alpha of 42.56 percentage points. The five-year performance is even more impressive, with 218.18% returns versus the Sensex's 65.60%, though this partly reflects the recovery from COVID-19 lows. The ten-year return of 656.84% demonstrates the wealth-creation potential of the Bajaj Group's portfolio companies over extended periods.
| Period | Stock Return | Sensex Return | Alpha |
|---|---|---|---|
| 1 Week | 1.72% | 1.79% | -0.07% |
| 1 Month | -2.74% | -2.27% | -0.47% |
| 3 Months | -9.87% | 0.43% | -10.30% |
| 6 Months | -21.68% | 3.45% | -25.13% |
| YTD | -3.85% | -1.65% | -2.20% |
| 1 Year | -7.35% | 6.66% | -14.01% |
| 3 Years | 80.32% | 37.76% | +42.56% |
| 5 Years | 218.18% | 65.60% | +152.58% |
The stock currently trades below all key moving averages—5-day (₹10,713.18), 20-day (₹10,787.10), 50-day (₹11,035.50), 100-day (₹11,789.01), and 200-day (₹12,598.33)—indicating sustained technical weakness. The bearish trend that commenced on November 7, 2025, at ₹12,596.15 remains intact, with multiple technical indicators including MACD, moving averages, and KST all flashing bearish signals. The stock's high beta of 1.21 suggests it is more volatile than the broader market, amplifying downside risks in weak market conditions.
Investment Thesis: Quality Company, Challenging Valuation
The investment thesis for Bajaj Holdings rests on several pillars. The company provides diversified exposure to three high-quality Bajaj Group companies across financial services and automotive sectors, each commanding leadership positions. The debt-free balance sheet with ₹62,687.55 crores in shareholder funds provides financial flexibility and downside protection. The stable promoter holding of 51.46% ensures governance continuity and alignment with minority shareholders.
However, several factors constrain the investment case. The ROE of 10.44% and ROCE of 1.20% indicate suboptimal capital efficiency despite the quality of underlying assets. The holding company structure inherently trades at a discount to NAV, and this discount appears unlikely to narrow in the near term. The recent underperformance, with the stock down 21.68% over six months whilst the Sensex gained 3.45%, reflects genuine concerns about value creation. The proprietary Mojo score of 47/100 places the stock firmly in "SELL" territory, driven by bearish technicals and recent underperformance.
Key Strengths & Risk Factors
KEY STRENGTHS ✓
- Premium Portfolio Holdings: Strategic investments in Bajaj Finserv, Bajaj Auto, and Maharashtra Scooters provide exposure to market leaders
- Debt-Free Balance Sheet: Zero debt with ₹62,687.55 crores in shareholder funds ensures financial stability
- Stable Promoter Base: Consistent 51.46% promoter holding demonstrates long-term commitment
- Strong Long-Term Returns: 218.18% five-year return and 656.84% ten-year return validate wealth creation
- Diversified Exposure: Portfolio spans financial services and automotive sectors, reducing concentration risk
- Good Quality Grade: Company qualifies as good quality based on long-term financial performance
- Positive Financial Trend: H1 FY26 net sales growth of 68.82% indicates improving momentum
KEY CONCERNS ⚠
- Weak Capital Efficiency: ROE of 10.44% and ROCE of 1.20% indicate poor returns on substantial capital base
- Holding Company Discount: Structural discount to NAV limits value realisation for shareholders
- Recent Underperformance: Down 21.68% over six months versus Sensex gain of 3.45%
- Bearish Technical Trend: Stock below all major moving averages with multiple bearish indicators
- Volatile Earnings: Standalone net profit swings from ₹1,610.52 crores (Q2) to ₹185.45 crores (Q3)
- Limited Dividend Yield: 0.85% yield provides minimal income component for investors
- Institutional Caution: Insurance companies reducing stakes from 1.17% to 0.69%
Outlook: What to Watch
POSITIVE CATALYSTS
- Improvement in ROE above 12-13% through better capital deployment
- Narrowing of holding company discount as market recognises portfolio value
- Sustained growth in portfolio companies driving consolidated earnings
- Technical trend reversal with stock reclaiming 200-day moving average at ₹12,598
- Increased dividend payout or special dividends to unlock value
RED FLAGS
- Further deterioration in ROE/ROCE metrics indicating capital misallocation
- Continued underperformance versus Sensex and peer group
- Widening of holding company discount beyond current levels
- Decline in mutual fund and FII holdings signalling institutional exit
- Break below 52-week low of ₹10,406, triggering fresh selling pressure
The Verdict: Quality Franchise, But Timing Concerns Persist
Score: 47/100
For Fresh Investors: Avoid initiating positions at current levels. Whilst the company offers exposure to quality Bajaj Group assets, the combination of weak capital efficiency (10.44% ROE), bearish technical trend, and recent 21.68% six-month underperformance suggests better entry points lie ahead. Wait for technical trend reversal or significant price correction before considering entry.
For Existing Holders: Consider reducing positions on any technical bounce towards the 200-day moving average at ₹12,598. The holding company discount appears unlikely to narrow in the near term, and the weak ROE/ROCE metrics raise questions about management's ability to extract value from the substantial capital base. Book partial profits and reassess if the stock establishes support above ₹11,500.
Fair Value Estimate: ₹11,200-11,500 (3-6% upside from current levels of ₹10,883), though technical weakness suggests downside risks persist towards ₹10,400 support zone.
Note- ROCE= (EBIT - Other income)/(Capital Employed - Cash - Current Investments)
⚠️ Investment Disclaimer
This article is for educational and informational purposes only and should not be construed as financial advice. Investors should conduct their own due diligence, consider their risk tolerance and investment objectives, and consult with a qualified financial advisor before making any investment decisions.
