Buy Bajaj Finance; target of Rs 8950: ICICI Direct

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ICICI Direct's research report on Bajaj Finance

Bajaj Finance is a dominant player in the consumer finance space while it also has made a foray into various lending segments wherein housing has grown to a significant size. Consumer business forms ~35% of overall consolidated AUM Bajaj Finance maintained strong operating metrics over various credit and rate cycles leading to >18% RoE and >3% RoA consistently

Outlook

We believe with NNPA guidance of <1% and strong credit growth with payments foray we continue to value the stock at ~10x P/ABV on FY23E and maintain target price of Rs 8950. Premium valuations stay as BFSI fintechs with low profits/ losses are still getting significant valuations.

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