Bajaj Finance Q1 Results Review — PL Capital Maintains 'Hold' On Rich Valuations
While the brokerage is positive on the growth outlook and execution capability of Bajaj Finance, valuation continues to be rich, hence maintains Hold.
Mr. Anup Saha (current MD) has resigned and to ensure continuity, Mr. Rajeev Jain has been re-designated as the new MD until Mar-28. Bajaj Finance highlighted that it is working on a new succession plan and will present the same to the Nomination and Remuneration Committee in the next six months.
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PL Capital Report
Bajaj Finance Ltd.'s assets under management grew 25% YoY to Rs 4,414.5 bn; we expect a similar run-rate in FY26E as the company adds new verticals (Cars, Gold, MFI) and customers (~14-16 million).
Expect NIM to improve by ~10 bps in FY26 supported by a lower cost of borrowing. Credit cost continues to be elevated in the quarter (at 2%) on account of higher stress in the auto/ MSME portfolio.
Expect a moderation in FY26, factoring a healthy trend in early-stage delinquencies.
We make minor changes to our FY26/FY27 estimates and assign a multiple of 3.9x (unchanged) on Mar’27 adjusted book value with a target price of Rs 900.
While we are positive on the growth outlook and execution capability of the management, valuation continues to be rich (trading at 1-year forward of P/ABV of 4.6x). Maintain Hold.
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