ICICI Direct's research report on Bajaj Finance
Bajaj Finance with its digital transformation is quickly moving from just consumer finance to multiple segments and harnessing it large franchise base digitally. Housing has grown to a significant size. AUM (₹204018 crore) mix as of June 30, 2022 – Consumer: Rural: SME: Commercial: Mortgage at 44%:14%:18%:15%:9%. Bajaj Finance maintained strong operating metrics over various credit and rate cycles leading to >18% RoE and > 4% RoA.
The core business has got potential and is well on track to get transformed into an adaptable new age fin-tech. No plans to convert to a bank on immediate basis. However, with recent valuation reset across financials led us to revise our TP to ₹ 8500 from Rs 9500 valuing at 7.5x FY24E ABV.
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