Sharekhan's research report on Bajaj Finance
Moderation in credit costs and stable NIMs would support earnings growth from H2FY25 onwards, however Q2 would see higher credit cost and continued pressure on margins. Management is guiding for a 26-28% AUM growth in FY2025. Tightening of credit filters in unsecured segment will result in slower growth in unsecured but would be offset by faster growth in secured segment. Bajaj Finance is consistently outpacing industry growth while maintaining sector leading profitability metrics across cycles drives our positive view. We believe underperformance could reverse led by receding headwinds from H2FY25.
Outlook
We reiterate a Buy rating with a revised SOTP of Rs. 9,940 (valuing stock at 4.9x/ 4.0x of FY26/FY27 BV estimates on standalone basis plus considering Bajaj Housing Finance’s valuation). Stock trades at 4.1x/3.4x/2.8x FY2025E/FY2026E/FY2027E BV (standalone) estimates.
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