Prabhudas Lilladher is bullish on Bajaj Finance has recommended buy rating on the stock with a target price of Rs 3860 in its research report dated August 08, 2019.
Prabhudas Lilladher's research report on Bajaj Finance
We initiate coverage on Bajaj Finance (BAF) with a BUY given formidable franchise in consumer financing, strong growth momentum in rural finance and expected uptick in mortgage business post spin off in step down subsidiary. BAF has emerged strong in the recent NBFC rout given 1) <2% GNPA and 65-70% PCR across cycles, avg. 40% positive ALM gap in short maturity buckets and diversified liability mix. We believe a CAGR of 31% in AUM and stable asset quality will enable 32% PAT CAGR over FY19-21. We expect premium valuations to sustain given ROA and ROE of 3.7%/20.1%, lower ALM risk and strong retail presence in consumer segment.
Outlook
We assign P/ABV multiple of 6.9x FY21E to arrive at price target of Rs 3,860.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Subscribe to Moneycontrol Pro and gain access to curated markets data, trading recommendations, equity analysis, investment ideas, insights from market gurus and much more. Get Moneycontrol PRO for 1 year at price of 3 months at 289. Use code FREEDOM.
Read More
