Moneycontrol

Budget 2021

Associate Partners:

  • SMC
  • Samsung
  • Volvo

Moneycontrol

Budget 2021

Associate Partners:

  • SMCSamsungVolvo
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Accumulate Bajaj Finance; target of Rs 5491: Prabhudas Lilladher

Prabhudas Lilladher recommended accumulate rating on Bajaj Finance with a target price of Rs 5491 in its research report dated January 05, 2021.

January 14, 2021 / 08:57 PM IST
 
 
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Prabhudas Lilladher's research report on Bajaj Finance


BAF’s Q3FY21 business update indicates strong customer augmentation but continued caution on incremental lending. 5% AUM growth over Q2-Q3FY21, slowing incremental loans trend QoQ in Q3FY21 and channel checks suggesting reduction in LTVs with stringent KYC checks indicate Co.’s precedence for credit quality over aggressive book expansion. While channel checks suggest improving consumer financing, BAF’s cognizance on delinquency control until clarity emerging on credit bureau stands credible. Against this backdrop and strong price momentum, we believe BAF is entering into a priced-to-perfection zone.


Outlook


Hence, we downgrade the stock to Accumulate (earlier BUY) valuing BAF at 6.7x PABV Mar’23E implying price target of Rs 5,491. BAF stands poised to deliver 19-20% ROEs/3.8% RoAs by FY23E and hence remains a constructive bet over 3 years’ time frame.


For all recommendations report, click here


Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies 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.

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first published: Jan 6, 2021 01:01 pm

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