Bajaj Finance - Standing The Test Of Time; ICICI Securities Initiates Coverage With A Buy

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..ICICI Securities Report.We initiate coverage on Bajaj Finance Ltd. with a Buy rating and a target price of Rs 8,500, valuing standalone business at ~five times FY26E adjusted book value and adding ~Rs 830 for Bajaj Housing. Our target multiple of ~five times for standalone business is premised on:new customer addition of ~3.5 million per quarter (in-line with FY23-9M FY24 run rate) resulting in assets under management compound annual growth rate of 29% in FY24-FY26E;steady net interest margins at 11.5%-12% in FY24-FY26E supported by strong parentage and ‘AAA’ credit rating, with other income generated through third-party products further supporting the top-line; and likely credit costs at ~200 basis points with steady gross non-performing assets. On balance, we expect return on asset trajectory of 4.5-5% in FY24-FY26E and return on equity of 19-20% during the same period..Key risks Prolonged regulatory challenges with respect to consumer lending, ecommerce/EMI cards and co-branded cards may adversely impact its business and financial performance. In case of conversion to bank, the company’s profitability might be impacted whilst meeting CRR, SLR and PSL requirements. RBI has granted an extension until December 21 2024, while Bajaj had sought a longer extension for its credit card ties with RBL Bank Ltd. Hence, if the extension does not go through, then distribution fee income for RBL could see a sizeable decline.The company has grown rapidly in the past and its ability to sustain the growth rate and financial performance will be a key monitorable.  Inability to attract and retain relationships with the distribution channels and customers, impacting the overall growth targets of the company..Click on the attachment to read the full report:.India Defence Industry - Moving Towards A Sustainable Defence Ecosystem; Nirmal Bang Initiates Coverage.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Bajaj Finance - Standing The Test Of Time; ICICI Securities Initiates Coverage With A Buy

Sets target price of Rs 8,500, valuing standalone business at ~five times FY26E adjusted book value and adding ~Rs 830 for Bajaj Housing.

Choose a plan