Buy Bajaj Finance; target of Rs 8252: Geojit

Geojit's research report on Bajaj Finance

Bajaj Finance Ltd (BFL) is a leading non-banking financial companies (NBFC) in India. It is engaged in lending across retail, SME and commercial customers and accepts public and corporate deposits. In Q1FY24, net interest income (NII) rose 26.5% YoY to Rs. 8,395cr. PAT increased 32.4% YoY to Rs. 3,437cr, aided by better operating leverage. The company reported its highest ever quarterly AUM growth of Rs. 22,718cr. Asset quality was strong, with GNPA/NNPA ratios at 0.87%/0.31%. Market leadership, strong distribution reach, healthy customer addition, digital transformation, robust AUM growth and strong asset quality augur well for the company’s future performance.

Outlook

NIM levels may moderate in the upcoming quarters due to rising cost of funds, but we firmly believe in the company’s long term growth prospects. Therefore, we reiterate our BUY rating on the stock with a revised target price of Rs. 8,252 based on 6.1x FY25E BVPS.