KRChoksey's research report on Bajaj FinanceIn a seasonally strong quarter, Bajaj Finance (BAF) reported all-round performance during Q1FY17. Stellar 53.8% Y-o-Y growth in PAT at INR 4.24 bn buoyed by traction in NII (43.4% Y-o-Y) hinging upon tenacious AUM (healthy 39.5% Y-o-Y growth). We derive greater comfort in BAF’s strategy to recognize and provide for losses upfront and ahead of regulatory requirements. The case in point being one-time accelerated provisions (INR 191 mn) made against mortgage loans (similar strategy was executed the previous quarter against one stressed infra lending account). With stupendous run-up in valuations and stock making new highs at regular intervals, we maintain ACCUMULATE rating on the stock, but tweak our target price to INR 10,732 (earlier INR 8,212), as we believe the company of this stature definitely commands a multiple of 5.0x P/ABV (FY18E). That said, we believe post split, the stock is again posied to put up a significant upside potential. At CMP the stock trades 4.6x FY17E FY18E P/ABV.For all recommendations, 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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