The share price of Bajaj Finance tumbled 2.38% to Rs 7,900, a day after the company posted a growth of 27.7% in its net profit at Rs 3,550.80 crore in the second quarter, compared to Rs 2,780.65 crore during the Q2FY23. The company posted revenue from operations at Rs 13,378.26 crore, up 34.2% as against Rs 9,970.13 crore during the same period last year.
The stock price of Bajaj Finance slipped 1.65% in the last five days, while it surged 5.08% in the last one month, a whopping 34.07% in the last six months and 7.25% in the last one year.
Motilal Oswal Financial Services: Buy – Target Price: Rs 9,600
“We would watch-out for the degree to which the NIM compression can be offset with operating leverage. Customer acquisitions and the new loan trajectory have been strong. The momentum will only get stronger ahead, with the digital ecosystem – app, web platform and full-stack payment offerings – in place. Maintain ‘Buy’ with a Target Price of Rs 9,600 (premised on 5.7x Sep’25E BVPS).
HDFC Securities: Buy – Target Price: Rs 8,870
“While our FY24 AUM growth forecast (+28%) is moderately behind management guidance, we believe that NIM compression is likely to be offset by improving operating leverage (Q2FY24: 34%). We believe that the increasing scale of operations, concomitant with rising competitive intensity, is likely to translate into a slower pace of AUM growth (sub-25%) over the medium term. We introduce our FY26E forecasts and maintain ‘Add’ with a revised RI-based Target Price of Rs 8,870 as we roll forward to Sep’25 (implied P/B of 6x Sep-25 ABVPS).”
Axis Securities: Buy – Target Price: Rs 9,425
“Post a strong operational performance in H1FY24, BAF is eyeing to replicate a similar robust performance in H2FY24. Even though margin pressure will continue over H2FY24, improving cost ratios will partially offset the impact of margin pressure and enable BAF to deliver a healthy RoA of 5%+ over the medium term. The recent capital raise will help BAF fuel its medium-term growth momentum. We broadly maintain our estimates over FY24-25E and introduce FY26E estimates. We reiterate our ‘Buy’ recommendation on the stock. BAF currently trades at 5.3x Sep’25E ABV. We value the stock at 6.1x Sep’25E ABV and arrive at a Target Price of Rs 9,425/share, implying an upside of 16% from the CMP.”
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