Buy Bajaj Finance; target of Rs 3060: Sharekhan

Sharekhan`s research report on Bajaj Finance“Bajaj Finance reported a healthy set of numbers for Q2FY2015 as the net profit grew by 18% YoY to Rs197 crore. The core net interest income growth was even better (up 27% YoY) led by a strong growth in the AUM (up 41% YoY). The provisions increased by 52% partly contributed by loan book expansion. The asset quality deteriorated quarter on quarter due to the slippage of an infrastructure account into NPA. On a proactive basis, the company has already paused infrastructure and construction equipment lending while in the other segments it does not foresee any meaningful stress. The strong risk management practices and conservative provisioning enhance comfort on the asset quality.” “Bajaj Finance has deepened its presence in the consumer segment and investment in the new business is beginning to yield returns. We expect the company to maintain a healthy asset quality and strong return ratios (RoA of 3.2% and RoE of 21%) till FY2017. While the stock has appreciated by 52% since our initiation on May 2014, we maintain a positive view on the stock with a revised price target of Rs3,060 from a medium-term perspective,” says Sharekhan research report. 

For all recommendations, click here 

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Read More