Sharekhan's research report on Bajaj Finance
Overall operating performance was in line however higher credit (2.1% versus 1.9% q-o-q) was a key dampener resulting in muted earnings growth. Management guided that credit cost has probably peaked in Q2 as bounce rates are lower and additions to stage2/stage3 have moderated q-o-q, which is a key positive although overall credit cost guidance has been increased to 2.05% vs earlier of 1.75-1.85% for FY25. The company is reasonably confident that earnings growth is expected to gradually converge with asset growth, led by moderation in credit costs and stable NIMs in FY26 and outlook for H2FY25 is better than H1.
Outlook
At CMP, the stock trades at 4.2x/3.5x/3.0x FY2025E/FY2026E/ BV estimates. We retain our Buy rating with a revised PT of Rs. 9,500 as risk-reward is attractive. Underperformance could reverse as outlook gradually improves led by receding headwinds.
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