Buy Bajaj Finserv; target of Rs 7500: Sharekhan
Sharekhan is bullish on Bajaj Finserv has recommended buy rating on the stock with a target price of Rs 7500 in its research report dated October 22, 2020.
Oct 27, 2020 / 04:00 PM IST
Sharekhan's research repor on Bajaj Finserv
Bajaj Finserv’s (BFS; holding company) results for Q2FY2021 were mixed; Income from operations came above estimates, but PAT declined by 19.9% y-o-y (below estimates).. Lending business, Bajaj Finance Limited’s (BFL) Q2FY2021 results were mixed. Operational numbers were in-line with estimates and asset quality improved sequentially. However, higher provisions (taken on prudent basis for Stage 1 and 2 loans) due to upfronting of provisions impacted PAT. Insurance subsidiary, BAGIC posted strong results, (helped by lower claims) in motor OD; BALIC’s PAT declined (due to higher new business strain; absence of capital gains seen in Q2FY2020); but healthy APE growth is encouraging.
The ~40% holding company discount to Bajaj Finserv’s valuations make risk return attractive. We maintain our Buy rating with an unchanged SOTP-based PT of Rs. 7,500.
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