Neutral Bajaj Finance; target of Rs 7500: Motilal Oswal

Motilal Oswal's research report on Bajaj Finance

Bajaj Finserv hosted its investor day on 10th Dec’24, wherein the senior management of Bajaj Finance (BAF) led by Mr. Rajeev Jain, MD, unveiled BAF 3.0 – a FINAI company - and gave a sneak peek into its Long-Range Strategy (LRS) 2025-29. BAF has demonstrated strong growth in the last 17 years, establishing itself as a leader in India’s financial services sector. With a robust strategy underpinned by innovation and technology, BAF is well poised to achieve its FY25 targets, including INR4t in AUM and continued leadership in financial performance. In FY25, BAF aims to disburse over 40m loans and scale up to a 100m customer franchise.

Outlook

While the valuations are attractive at 3.7x P/BV and 20x FY26E P/E, we do not anticipate any significant upside catalysts until it successfully navigates the asset quality challenges in its B2C loan book and makes concerted efforts to improve the proportion of secured loans in its loan mix. Maintain Neutral with a TP of INR7,500 (3.6x Sep’26E P/BV).