Buy Bajaj Finance; target of Rs 8030: KR Choksey

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26 Aug, 2025 12:21

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KR Choksey's research report on Bajaj Finance

Net Interest Income (NII) for Q3FY23 increased by 23.9% YoY (+6.2% QoQ) to INR 74,331 Mn. Pre-Provision Operating Profit (PPOP) stood at INR 48,529 Mn, a growth of 23.8% YoY (+8.2% QoQ) in Q3FY23. Loan losses and provisions for Q3FY23 was INR 8,413 Mn as against INR 10,512 Mn in Q3FY22 (vs INR 7,342 Mn in Q2FY23). Profit after tax for Q3FY23 increased by 39.9% YoY (+6.9% QoQ) to INR 29,729 Mn from INR 21,253 Mn in Q3FY22 led by strong operating performance and lower provisions. Gross NPA and Net NPA as of December 31, 2022, stood at 1.14% and 0.41% respectively, as against 1.17% and 0.44% as of September 30, 2022. Capital adequacy ratio (including Tier-II capital) as of December 31, 2022, was 25.1%. The Tier-I capital was 23.3%. The stock is currently trading at 6.8x/5.5x/4.5x P/ABV multiple for FY23E/FY24E/FY25E Adjusted Book Value.

Outlook

We assign a P/ABV multiple of 7.5x on FY25E adj. book value of INR 1,319 to arrive at a T.P. of INR 8,030 per share (earlier INR 8,630), an upside of 36.5% over CMP. Accordingly, we maintain our “BUY” rating on BAF shares.

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Bajaj Finance - 01 -01-2023 - kr