Buy Bajaj Finserv; target of Rs 1935: KR Choksey

KR Choksey's research report on Bajaj Finserv

The consolidated revenues stood at INR 314,799 Mn, an increase of 35.2% YoY (-1.8% QoQ) for Q1FY25. Revenues were above our estimates, led by higher growth in premiums and other operating income. In Q1FY25, Bajaj Finserv reported a consolidated profit of INR 21,377 Mn, a growth of 10.0% YoY (+0.9% QoQ). The cost-to-income ratio for the quarter stood at 70.4%, as against 74.6% in Q4FY24. BAGIC’s profit after tax for Q1FY25 increased by 39.0% YoY to INR 5,760 Mn. For BALIC, shareholders' profit after tax during Q1FY25 declined to INR 970 Mn from INR 1,550 Mn in Q1FY24.

Outlook

We raise our target price to INR 1,935 per share from the previous INR 1,880, considering the strong momentum in the lending and insurance segments. We foresee a gradual increase in the performance of the emerging businesses in the upcoming quarters. We maintain our “BUY” rating as the target price implies an upside of 18.4%.

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