January 31, 2017 / 15:32 IST
Bajaj Finance’s (BAF) 3QFY17 PAT increased 36% YoY to INR 5.6b (26% above estimate), led by robust AUM growth of 33% YoY (est. of +27%) and better-than-expected margins performance. Marginal improvement in costs and asset quality also offered support.
OutlookWhile yields are likely to remain under pressure due to lower share of CD financing, BAF continues to diversify its liability mix – bank borrowings account for 37% of total borrowings. The stock trades at 6.4x/5.2x FY17E/18E BV. We raise FY17E- 19E EPS by 5-7%, and increase TP to INR 1,276. Buy.
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