Buy Bajaj Finance; target of Rs 7635: KR Choksey

KR Choksey is bullish on Bajaj Finance has recommended buy rating on the stock with a target price of Rs 7635 in its research report dated April 27, 2023.

Broker Research

April 29, 2023 / 10:36 IST

Buy

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KR Choksey's research report on Bajaj Finance

Net Interest Income (NII) for Q4FY23 increased by 28.1% YoY (+4.5% QoQ) to INR 77,676 Mn. For the entire fiscal year FY23, NII was INR 2,88,375 Mn, up 31.8% YoY. Pre-Provision Operating Profit (PPOP) stood at INR 51,190 Mn, a growth of 29.0% YoY (+5.5% QoQ) in Q4FY23. The PPOP for FY23 was INR 1,87,158 Mn, a growth of 30.8% YoY. Profit after tax for Q4FY23 increased by 30.5% YoY (+6.2% QoQ) to INR 31,578 Mn from INR 24,195 Mn in Q4FY22. For FY23, the net profit stood at INR 1,15,077 Mn, a growth of 63.7% YoY. Gross NPA and Net NPA as of March 31, 2023, stood at 0.94% and 0.34%, respectively, as against 1.14% and 0.41% as of December 31, 2022. The capital adequacy ratio (including Tier-II capital) as of March 31, 2023, was 24.97%. The Tier-I capital was 23.20%. Assets under management (AUM) grew by 25.3% YoY/ 7.2% QoQ as of March 31, 2023, at INR 24,73,790 Mn.

Outlook

We assign a P/ABV multiple of 7.0x on FY25E adj. book value of INR 1,339 to arrive at a T.P. of INR 7,635 per share (earlier INR 8,030), an upside of 23.1% over CMP. Accordingly, we maintain our “BUY” rating on BAF shares.

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