KR Choksey has given Buy recommendation for Bajaj Finance with a target price of Rs. 8183 in its research report issued on Apr 30, 2022
KR Choksey’s research report on Bajaj Finance
Net Interest Income (NII) for Q4FY22 increased by 30% YoY to INR 60,640 Mn. For the full year FY22, NII stood at 2,18,842 Mn, an increase of 26.8% YoY. Operating Profits stood at INR 39,671 Mn, a growth of 29.5% YoY. For the full year FY22, operating profits saw a 19.6% YoY growth at INR 1,43,072 Mn. The cost to income ratio for Q4FY22 was stable at 34.6%. Profit after tax for Q4FY22 increased by 78.5% to INR 24,195 Mn from INR 13,556 Mn in Q4FY21. Assets under management (AUM) grew by 29% YoY as on 31st March 2022 at INR 19,74,520 Mn. Core AUM in Q4FY22 was approximately INR 1,08,370 Mn. Gross NPA and Net NPA as of 31st March 2022 stood at 1.60% and 0.68% respectively, as against 1.73% and 0.73% as of 31st December 2021. Capital adequacy ratio as of 31st March 2022 was 27.22%. The Tier-I capital was 24.75%.
We assign a P/B multiple of 8.0x (8.5x earlier) on FY24E adj. book value of INR 1,023 to arrive at a T.P. of INR 8,183 per share (previously INR 8,693 per share), an upside of 22.7% over CMP. Accordingly, we maintain our “BUY” rating on BAF shares.