February 02, 2017 / 15:41 IST
Bajaj Finance (BFL) is one of the leading asset finance NBFCs. The USP of BFL is its stronghold in the consumer durable (CD) & lifestyle product financing business (16% of the AUM) wherein it does not have any major competition. These segments are under penetrated and growing in size, thus providing a lucrative opportunity for growth. In FY16, BFL served 68 lakh clients.
OutlookWe expect PAT CAGR of 34% CAGR in FY16-19E to Rs 3068 crore, as we factor in 32% CAGR in AUM & lower CI ratio. BFL’s premium valuations are expected to sustain on better earnings visibility. We maintain our BUY recommendation and target price at Rs 1300/share, as we value it at 22.8x FY19E EPS.
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