Sharekhan is bullish on Bajaj Finserv has recommended buy rating on the stock with a target price of Rs 7500 in its research report dated July 23, 2020.
Sharekhan's research report on Bajaj Finserv
Bajaj Finserv (holding company) saw its consolidated net profit rise by 43.7% to Rs 1,215 crore, while revenue increased 15.6% y-o-y to Rs 14,190 crore in Q1 FY21 mainly helped by strong earnings from its insurance subsidiaries. Bajaj Finance (lending subsidiary) saw tepid AUM growth, but asset quality improved q-o-q and moratorium book share declined to 15.7% (from 27% earlier). Insurance arms saw strong PAT growth helped by lower claims and strong cost management. Even though Q1 topline was impacted by COVID-19 as expected, pick-up on a month-on-month basis on premiums is encouraging, reflecting rapid normalisation. All subsidiaries are well-capitalised with strong operating metrics, which will enable them withstand and tide over near-term challenges.
Outlook
We maintain our Buy recommendation on Bajaj Finserv with a revised SOTP-based price target of Rs. 7,500.
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