Prabhudas Lilladher is bullish on Bajaj Finance has recommended buy rating on the stock with a target price of Rs 4668 in its research report dated October 22, 2019.
Prabhudas Lilladher's research report on Bajaj Finance
Maintaining robust growth trajectory, NII at Rs39.9bn (PLe: Rs38.8bn) grew strong 48% YoY exceeding AUM traction of 38% YoY for Q2FY20. While business seasonality led to sequential decline in customer addition at 1.9mn, such a run-rate still stands higher vis-à-vis historical 1.5mn. BAF's unique customer franchise (now 39mn) backed by existing customer base that formed 70% of incremental acquisition only continues to get better. Such a healthy core book performance translated into robust PPoP at Rs 26.2bn (PLe: Rs 25.1bn) growing 50% YoY/9% QoQ. BAF recorded one-time marginal gains to the tune of Rs10mn arising out of tax adjustments under new regime. Subsequently, PAT at Rs 15.1bn [ PLe Rs13bn] increased 63% YoY/26%QoQ.
Consequently, BAF remains poised to deliver 21.0% ROEs/3.5% RoAs by FY22E. We reiterate BUY rating on the stock valuing Co. at 6.6x PABV Sep'21 estimates arriving at price target of Rs 4,668 (earlier Rs4,681).
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