Key Takeaways
- You can capture upside from Bajaj Housing’s solid profit jump while staying alert to pricing pressure in premium loan segments.
- Mobikwik’s swing to profit and 19% share surge highlight a broader digital‑payments tailwind, but margin sustainability remains a question.
- Ather’s loss compression and 50% revenue growth suggest the EV two‑wheeler niche is moving from hype to traction.
- The India‑US trade deal is lifting sentiment across finance, fintech and EV space, creating a macro‑friendly backdrop.
- Our playbook outlines bullish entry points, valuation levers, and bearish risk triggers for each stock.
Most investors missed the hidden catalysts in the latest Q3 filings. That could cost you.
Why Bajaj Housing Finance’s Margin Improvement Beats Sector Trends
Bajaj Housing Finance (BHFL) posted a 21% YoY net‑profit rise to ₹664.9 crore, propelled by a 19% jump in net interest income (NII). The NII increase reflects a healthier loan‑book mix and disciplined pricing, even as the prime‑segment pricing pressure intensifies. Its gross NPA margin fell to 0.27% from 0.29% and net NPA to 0.11% from 0.13%, underscoring tighter credit quality.
Technical note: Net Interest Income is the difference between interest earned on loans and interest paid on deposits, a core profitability driver for NBFCs. A shrinking NPA margin signals fewer bad loans, which directly protects earnings.
Sector‑wide, Indian housing‑finance NBFCs have been wrestling with higher funding costs and a slowdown in premium‑segment demand. Competitors such as LIC Housing Finance and Aditya Birla Housing Finance are seeing margin compression, making BHFL’s relative resilience noteworthy.
Historical context matters: In FY22, BHFL’s profit margin dipped sharply when RBI tightened NBFC regulations, but the firm rebounded by diversifying into near‑prime and affordable segments. That strategic pivot is now paying off, with an asset‑under‑management (AUM) CAGR projected at 23% FY25‑28E.
Motilal Oswal’s neutral rating with a ₹100 target price implies an 11.5% upside from the recent close, but the note warns that increasing competition from PSU banks could force BHFL to trim loan rates, pressuring NII. Investors should watch the RBI’s policy stance on NBFC liquidity and the upcoming credit‑cost outlook for early‑FY27.
Mobikwik’s Turnaround: What the 19% Jump Means for Digital Payments
Mobikwik (MWBK) swung to a modest ₹4 crore profit after a ₹55.28 crore loss a year earlier, while revenue climbed 7% to ₹288.95 crore. The stock surged 19% to ₹235.90, reflecting market optimism around its path to profitability.
Two forces are driving this recovery. First, the firm’s merchant acquisition engine has expanded its QR‑code network, capturing a larger slice of India’s cash‑less payments boom. Second, the company’s “Pay Later” line‑of‑credit product is now generating higher interest yields, improving the overall NII profile.
Competitor analysis shows PhonePe and Google Pay continue to dominate transaction volume, but Mobikwik’s focus on tier‑2 and tier‑3 cities gives it a differentiated growth runway. The recent India‑US trade pact, which includes digital‑services provisions, could further ease cross‑border payment frictions, indirectly benefiting domestic wallets.
From a valuation perspective, the firm still trades at a premium to earnings due to its nascent profit streak. Investors should monitor the churn rate of active users and the cost‑to‑acquire (CAC) metric; a rise in CAC could erode margins despite top‑line growth.
Ather Energy’s Loss Compression: Is the EV Two‑Wheeler Play Getting Real?
Ather Energy (Ather) posted a 57% YoY loss reduction to ₹84.6 crore, while revenue rocketed 50% to ₹953.6 crore. The stock jumped 13% to ₹684.85, buoyed by an upgraded target price from Nomura (₹812) and Emkay Global (₹1,000).
The loss compression stems from two levers: higher scooter deliveries (driven by new models like the Ather 450X) and better price realizations, thanks to improved supply‑chain efficiencies. Operating leverage is improving, as fixed costs are being spread over a larger volume base.
Within the Indian EV two‑wheeler space, Ola Electric and TVS Motor Company are expanding aggressively. However, Ather’s premium‑brand positioning and proprietary battery‑management system give it a defensible niche. The company’s recent partnership with a major battery supplier promises a reduction in battery‑cost per kWh, a key cost driver for EV margins.
Historically, early‑stage EV makers in India have faced steep cash‑burn cycles. Ather’s ability to narrow losses while scaling deliveries mirrors the 2020‑21 trajectory of Hero MotoCorp’s electric subsidiary, which turned profitable after a similar scaling phase.
Investors should keep an eye on the rollout of the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME‑II) incentives, as additional subsidies could lift demand and improve unit economics.
How the India‑US Trade Accord Fuels Growth Across These Names
The recently concluded India‑US trade deal removed several tariff barriers on technology and financial services, creating a more favorable environment for fintech and EV players. For BHFL, easier access to foreign capital can lower funding costs, supporting loan‑rate competitiveness. Mobikwik benefits from smoother cross‑border digital‑payment linkages, potentially unlocking new revenue streams from overseas remittances. Ather stands to gain from accelerated technology transfers and potential joint‑venture opportunities with US EV component manufacturers.
Sector‑wide, the agreement is expected to lift FDI inflows into India’s financial and clean‑energy sectors by an estimated 12% over the next three years, according to a recent industry outlook. This macro tailwind reinforces the upside catalysts outlined for each stock.
Investor Playbook: Bull vs. Bear Cases
Bull Case
- BHFL: Continued AUM growth, stable NIMs, and credit‑cost containment push earnings CAGR >20% through FY28.
- Mobikwik: Sustainable user‑base expansion, higher “Pay‑Later” yields, and favorable regulatory environment lift profitability.
- Ather: Scaling deliveries, lower battery costs, and government subsidies drive margin expansion, paving the way to breakeven by FY27.
Bear Case
- BHFL: Aggressive rate cuts by PSU banks compress loan spreads; rising NPA ratios could reverse credit quality improvements.
- Mobikwik: Rising CAC and intense competition erode top‑line growth; regulatory clampdowns on fintech could limit “Pay‑Later” product expansion.
- Ather: Supply‑chain bottlenecks, slower-than‑expected subsidy disbursement, or a price war with low‑cost rivals could keep losses elevated.
Strategically, position size should reflect the risk‑reward asymmetry. For BHFL, a modest long position at current levels aligns with the 11.5% upside target. Mobikwik may merit a smaller, opportunistic allocation given its volatility. Ather’s elevated valuation warrants a phased entry, perhaps using a stop‑loss just below the ₹620 support level to protect against a downside correction.
In summary, the Q3 earnings season has uncovered three distinct growth narratives that intersect with a supportive macro backdrop. By understanding the sector dynamics, competitive positioning, and valuation nuances, you can turn these catalysts into measurable portfolio gains.