Sharekhan has given Buy recommendation for Bajaj Finserv with a target price of Rs. 1950 in its research report issued on Oct 25, 2022
Sharekhan’s research report on Bajaj Finserv
Bajaj Allianz Life Insurance reported strong growth in Annualized Premium Equivalent(APE) which grew by 29% YOY driven by strong growth in individual APE by 31% YoY. VNB (Value of New business) margins expanded to 15.2% in Q2FY23 vs 13.9% in Q2FY22 led by a better product mix towards non-par. While, for Bajaj General Insurance, gross written premium decreased by 5% YoY. Excluding crop segment, it grew by 13% YoY led by group health (33%) and commercial line (12%). It reported muted growth in the motor segment (4% YoY) as well as the retail health segment (9% YoY). The company is focusing on better profitability here and maintaining a cautious stance in select segments with high pricing pressure like motor OD. On the lending side, Bajaj Finance reported steady performance for Q2FY23 driven by robust AUM growth (31% YoY/ 7% QoQ) and contained credit cost.
Outlook
We maintain our Buy rating on the stock with an unchanged SOTP-based PT of Rs. 1,950.