Bajaj Finance
A long-term play
Rating: Buy
(CMP: 4981, Price Target: 6000)
Company Description
BFL is one of India’s largest NBFCs for consumer finance. The company provides loans for two-wheelers,
consumer durables,housing, small businesses, construction equipment, and infrastructure finance. BFL
undertook business and organisational restructuring in FY2008 and re-defined small business and consumer financing as its key niches.
Key Investment Arguments
➡️Bajaj Finance Limited’s (BFL) Q3FY2021 results were mixed; operational numbers came largely in line with estimates.
➡️Asset quality improved on a q-o-q basis but continued elevated provisions (for Stage 1 and 2 loans) were dampeners.
➡️Management commentary on growth and asset-quality outlook are now more sure-footed; business transformation is encouraging for the long term.
➡️BFL is available at 6.9x/5.7x its FY2022E/FY2023E BVPS; We have fine tuned our estimates and target multiples. We maintain our Buy rating on the stock with a revised price target (PT) of Rs. 6,000.