Emkay Global Financial's research report on Bajaj Finance
Our positive stance on the stock is underpinned by 3 factors: i) Flawless execution of strategic plans being BAF’s biggest strength; its execution capabilities are as strong as ever. ii) Near-term challenges/concerns—such as RBI actions on EMI and E-com cards, Management succession & transition plans, and listing of the housing subsidiary—have already been identified, and a resolution for each is likely within the next one year. iii) Continuing with its immaculate 3i execution strategy (Invent, Innovate and Imitate), the company is well poised to deliver consol. AUM CAGR of ~25% and consol. PAT CAGR of 21.4%, over FY24-27E. BAF shares have materially underperformed in the past few years and, as the company continues to make good progress on its ‘Long Range Strategy’ (LRS 2028) in terms of advancing its customer franchise (83.6mn) and AUM (3.8-4% of retail credit/3-3.25% of overall credit), the recent correction (in last 2yr) in valuations provides an attractive entry point.
Outlook
We initiate coverage on Bajaj Finance (BAF) with a BUY recommendation and Mar-25E TP of Rs9,000/sh (~23.4% upside), implying FY26E consolidated P/B of 5.1x.
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