Anand Rathi
Bajaj Finance is one of the largest players in the rapidly growing consumer finance segment in India ,the company also has substantial business penetration in SME, commercial and rural lending. With housing subsidiary, mortgages are also gaining traction.
Bajaj Finance has a strong distribution network having presence in 1736 locations in India with over 84700+ active distribution points.
The company offers wide range of products to its customers through multiple segments which includes products such as consumer durable loans, digital product loans, lifestyle product loans, 2-wheeler and 3-wheeler loans, salaried personal loans, e-commerce consumer finance, working capital loans, loan to professionals, commercial loans, gold loans, home loans etc.
The AUM of the company has been appropriately diversified between consumer lending (46.6 percent), SME lending (31.38 percent), commercial lending (14.73 percent) and rural lending (7.3 percent).
In its latest quarterly results, Bajaj Finance has reported 54 percent growth in PAT to Rs 1059 crore led by 41 percent loan growth ,Asset quality remains under control with GNPAs and NNPAs coming at 1.55 percent and 0.62 percent respectively. Loan growth was largely led by consumer finance segment growing 42 percent YoY, 13 percent QoQ to Rs 43826 crore.
At CMP the stock is trading at 8.0x times FY19E book and 6.4x times FY20E book.
We initiate our coverage on Bajaj Finance with a BUY rating and target price of Rs 3370 per share.
Disclaimer: Moneycontrol advises users to check with certified experts before taking any investment decisions.
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