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Buy Bajaj Finserv; target of Rs 8203: KRChoksey

KRChoksey is bullish on Bajaj Finserv has recommended buy rating on the stock with a target price of Rs 8203 in its research report dated October 23, 2020.
Oct 26, 2020 / 01:33 PM IST
 
 
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KRChoksey's research report on Bajaj Finserv


Revenue from operations rose by ~6%YoY/ QoQ at INR 15,050 Cr. The insurance businesses grew 20% YoY, but the revenues at the NBFC were muted. Provision fell marginally by 1% QoQ to INR 1,660 Cr. PAT were lower by 18% YoY/QoQ as costs savings accrued. PAT for BALIC grew 13% YoY even as gross written premium degrew 3% YoY on account of cost saving, some of them structural. PAT for BAGIC fell 53% Y-o-Y to INR 977 Mn on account of higher new business strain and lower capital gains even as there are structural savings in costs. PAT/PPOP and NII did not grow on a sequential basis.


Outlook


We have used SoTP approach to arrive at a target of INR 8,203 (3.0x P/EV for BALIC on FY22E EVPS; 3.0x P/B for BAGIC on FY22E; 15x P/E for Windmill assets; and 6.2x P/ABV on FY22E for BFL); indicating an upside of 40% over CMP. Accordingly, we reiterate our “BUY” recommendation on the shares of Bajaj Finserv.


For all recommendations report, click here


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Broker Research
first published: Oct 26, 2020 01:33 pm

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