Moneycontrol
Feb 02, 2017 04:32 PM IST IST | Source: Moneycontrol.com

Accumulate Bajaj Finance; target of Rs 1202: KR Choksey

KR Choksey has recommended accumulate rating on Bajaj Finance with a target price of Rs 1202 in its research report dated February 02, 2017.


KR Choksey's research report on Bajaj Finance


Healthy AUM traction (33% Y-o-Y and 10% Q-o-Q growth) and stable asset quality (gross NPA at 1.47%) drove the earnings for Q3FY17. PAT at INR 5.56 bn recorded a robust 36% Y-o-Y and Q-o-Q growth led by strong NII (27% Y-o-Y and 26% Q-o-Q) and other income (106% Y-o-Y and 9% Q-o-Q growth). The sturdy growth in the AUM can be largely attributed to the increased disbursements and customer traction; number of loans disbursed surged 35% YoY to 2.9 mn, number of new customers rose 14% to 1.12 mn on Y-o-Y basis.


Outlook
The AUM growth was driven by staggering traction in 2W and 3W finance (36% Y-o-Y), Consumer durable finance (22% Y-o-Y). Firm business momentum underpinned by emboldened customer franchise (increased 25% Y-o-Y) coupled with structurally strong RoE profile and controlled asset quality continue to justify premium valuations, we maintain ACCUMULATE rating on the stock.

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