Prabhudas Lilladher's research report on Bajaj Finance
AUM grew 26% YoY to Rs 4,166.6 bn; we expect a growth of ~25% in FY26E as the company adds new verticals/ deepens geographical reach. Expect NIM to be stable in FY26 aided by an improvement in CoF. Credit cost saw a spike in the quarter (at 2.3%) due to a change in ECL assumptions (impact of Rs 3.59 bn). Expect a moderation in FY26 driven by an improvement in early-stage delinquencies.
Outlook
We assign a multiple of 3.9x on Mar’27 ABV with a TP of Rs 9,000. Company has seen a large shift in business mix, growth outlook and profitability metrics, hence our valuation is at a significant discount to the 5- year average P/ABV of ~6x. Assume coverage with a ‘HOLD’ rating.
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