Buy Bajaj Finserv; target of Rs 7500 : Sharekhan

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Sharekhan's research report on Bajaj Finserv

Bajaj Finserv (holding company) saw its consolidated net profit rise by 43.7% to Rs 1,215 crore, while revenue increased 15.6% y-o-y to Rs 14,190 crore in Q1 FY21 mainly helped by strong earnings from its insurance subsidiaries. Bajaj Finance (lending subsidiary) saw tepid AUM growth, but asset quality improved q-o-q and moratorium book share declined to 15.7% (from 27% earlier). Insurance arms saw strong PAT growth helped by lower claims and strong cost management. Even though Q1 topline was impacted by COVID-19 as expected, pick-up on a month-on-month basis on premiums is encouraging, reflecting rapid normalisation. All subsidiaries are well-capitalised with strong operating metrics, which will enable them withstand and tide over near-term challenges.

Outlook

We maintain our Buy recommendation on Bajaj Finserv with a revised SOTP-based price target of Rs. 7,500.

For all recommendations report, click here