IIFL is bullish on Bajaj Auto Finance and has recommended buy rating on the stock with a target of Rs 1000 in its September 13, 2010 research report.
"Bajaj Auto Finance (BFL) stock price has risen by 128% YTD suggesting that the market has priced in the upside to the growth outlook partially. A sharp run-up in the stock price may deter investors. However, we believe it is yet to capture the upside from the sustainable nature of growth in assets and earnings, benefits of economies of scale, and strong accretion to tangible book value. We expect BFL to raise additional capital to boost its capital position over the next 12 months, which will be accretive to book value and moderate valuation further."
"Bajaj Finance Ltd (BFL) is well-poised to deliver 40% assets CAGR and 62% earnings CAGR during FY10-13ii, driven by a favourable lending environment, strategic shift in focus, and normalisation of credit costs. The stock has risen by 128% YTD. It has priced in the normalisation of growth, in our view, but not the benefits of a strategic shift in focus fully. The stock currently trades at FY12ii P/B of 1.9x. We initiate coverage on BFL with a BUY and target price of Rs 1000 (upside of 31%)," says IIFL research report.
Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management.Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
