Tale of the Tape 

Howdy folks.

Nifty closed at record highs, but overall markets were flat after a boring range-bound trading session. Midcaps (-0.1%) and Smallcaps (-0.4%) traded mixed. The advance-decline ratio was in favour of the bears (3:2). Check out the Stocktwits Sentiment Meter:

Most sectors ended in the green. Real Estate (+0.6%) and Auto (+0.3%) were the top gainers. PSU Banks (-0.6%) and Metals (-0.4%) saw the most selling pressure.

Bajaj Housing Finance was locked in a +10% upper circuit after an insane listing yesterday. Read our top story to understand how to play the momentum AND long-term story.

Arkade Developers IPO opened for subscription this week. Check out our analysis below to help you decide whether to invest.

IGL and MGL saw big movements today after a UBS stamp of approval. Take a look at their charts below.

Ola Electric was locked in a +10% upper circuit after getting buy calls from Goldman Sachs and BofA. PS - the former sees a whopping +36% upside from current levels.

PN Gadgil Jewellers had a bumper market debut, ending the day +64% higher than its IPO price of Rs 480 p/sh.

Block deal reactions. Tata Motors fell -3% intraday after 1.9 cr shares (0.4% of total equity) changed hands in a large transaction. Also, BLS International Services cracked -4% after 55 lakh shares (1.3% equity) was traded in a block deal; the buyers and sellers were not immediately known.

DCX Systems was locked in a +5% upper circuit after its subsidiary bagged an industrial defence licence.

Reliance Infrastructure jumped +9% after announcing plans to raise ‘long-term’ funds.

Here are the closing prints:

Stock
Bajaj Housing Finance: To Buy Or Not To Buy?

The Bajaj Housing Finance juggernaut continued its march today, with the stock locked in a +10% upper circuit! For those that missed out, we don’t blame you for having major FOMO. Yes, the company’s valuations are crazy. But there’s a bunch of factors at play here.

1) Low float + high demand: Public shareholders currently own less than 12%, the rest is still held by the promoters. So, if Bajaj Housing Finance currently has a Rs 1.5 lakh cr market cap, that means there’s just ~Rs 18,000 cr worth of floating stock right now. Low supply + high demand = upper circuit until sentiment changes.

2) Valuations: At a +6x price-to-book ratio, the NBFC is expensive. That’s why the debate shifts to if the company is simply a ‘buy at any price’ stock. As market expert Deven Choksey puts it, Bajaj Housing Finance’s portfolio diversity & its 30% growth promise means it will always be “trading at a premium”. While one should wait for dips, Choksey says that if you average it out three years forward, its price-to-book ratio comes to 3.5x, which is kinda acceptable for a good quality stock!

3) Growth potential: The question then becomes if Bajaj Housing Finance is simply in a “league of its own” as Phillip Capital says. The brokerage says its benign credit costs + focus on lease rental discounting should see its balance sheet hit Rs 2 lakh cr by FY27. PS - they have a  target price of Rs 210 p/sh; +15% upside from current levels.

TL;DR: Insane demand for quality provides the stock with short-term momentum if you want to play that game. In the long-term, there’s a bull case for future growth if Bajaj absolutely kills it on the execution front.

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