Motilal Oswal has given Buy recommendation for Bajaj Finance recommended buy rating on the stock with a target price of Rs 9080 in its research re with a target price of Rs. 9080 in its research report issued on Jan 19, 2022
Motilal Oswal’s research report on Bajaj Finance
BAF delivered an all-round healthy performance in all its key business parameters. PAT grew 85% YoY and 44% QoQ to INR21.3b (17% beat) in 3QFY22. While NII rose 41% YoY to INR47.3b (6% beat), due to higher interest income from IPO financing and lower negative carry, it was slightly mitigated by higher opex (up 50% YoY and 9% above our estimate). Credit costs stood at INR10.5b (est. INR11.5b), which included an additional management overlay of INR2.5b in 3QFY22. GNPA/NNPA ratio improved by ~72bp/~32bp QoQ to 1.73%/0.78%. OTR book classified under Stage 2 stood at INR14.53b (~80bp of AUM). BAF carried ECL provision of INR3.17b (21.8%) in this book. Traction in the omnichannel strategy continued to remain strong, both for acquisition of EMI card customers (~492k) as well as for loans at the EMI store (~393k; 5% of new loans in 3QFY22). Stimulation of customers at the point of sale (POS) by leveraging its integrated offline to online framework led to originations of INR6b in personal loans and ~91k Credit Cards.
We expect BAF to deliver a RoA/RoE of 4.3-4.6%/21-23% over FY23-24E. Given the expected strength in asset quality in 2HFY22 and the sustained milestones-driven progress made by it in its digital transformation program, we reiterate our Buy rating with a TP of INR9,080 (8.5x FY24E BVPS).
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At 16:00 hrs Bajaj Finance was quoting at Rs 6,932.75, down Rs 440.30, or 5.97 percent.
It has touched an intraday high of Rs 7,368.00 and an intraday low of Rs 6,821.05.
It was trading with volumes of 85,442 shares, compared to its thirty day average of 65,656 shares, an increase of 30.14 percent.
In the previous trading session, the share closed down 2.11 percent or Rs 158.85 at Rs 7,373.05.
The share touched its 52-week high Rs 8,043.50 and 52-week low Rs 4,361.60 on 19 January, 2022 and 19 April, 2021, respectively.
Currently, it is trading 13.81 percent below its 52-week high and 58.95 percent above its 52-week low.
Market capitalisation stands at Rs 418,456.87 crore.