Morgan Stanley says Bajaj Finance should bounce back the fastest as conditions improve further.
Bajaj Finance share price gained 4.5 percent intraday on May 14 as Morgan Stanley had an overweight rating on the stock, with a target price at Rs 2,740, implying a 27 percent upside.
HSBC also has a “buy” call on the stock with a target price at Rs 3,700 per share, implying a 71 percent upside from current levels, CNBC-TV18 reported.
The stock has not seen any major recovery like other index heavyweights and even Nifty50 yet.
It gained just 9 percent in the last three weeks after falling 60 percent in previous two months.
It was quoting at Rs 2,229.10, up Rs 67.95 or 3.14 percent on the BSE at 10:47 hours.
Morgan Stanley expects Bajaj Finance to have above-industry return on equity (RoE) in FY21 and believes it should bounce back the fastest as conditions improve.
"Structural asset growth and RoE potential has been expanding, while valuations are also attractive at current levels," the global brokerage said.
HSBC feels the COVID-19 crisis may drive a marked change in spending patterns of consumers.
"We may see 'in-house' spending being favoured against 'out-of-home' spending. Financing needs are set to rise as consumers and companies push for no-cost EMI," said the brokerage.
Growth moderation may be less in the medium term than feared by market, it added.
With the intention of gradual opening of economy after announcing Rs 20 lakh crore package also could support the sentiment going ahead, experts say.
On May 13, Finance Minister Nirmala Sitharaman announced Rs 6 lakh crore package for micro, small & medium enterprises (MSMEs), NBFCs etc.
Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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