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Brokerages raise Bajaj Fin target price on Q4 numbers

MUMBAI: Brokerages raised target price on Bajaj Finance after the company’s strong showing in earnings performance for the quarter ended March.

Emkay Global raised target price by 1.3% to Rs 3,665 while maintaining a ‘buy’ rating and Jefferies has raised target price by 16.1% to Rs 3,600, also retaining its ‘buy’ recommendation. Morgan Stanley has raised target price on Bajaj Finance by 13.5% to Rs 2,950 and maintained ‘equal-weight’ rating. Deutsche Bank has maintained ‘hold’ rating on the stock and increased target price to Rs 2,700 from Rs 2,400. Credit Suisse has an ‘underperform’ view on the stock but raised target price to Rs 1,930 from Rs 1,660. Brokerages have raised target price but ratings are mixed.

Shares of Bajaj Finance surged 6.1% to end at Rs 3,301.20 on Friday, a day after it reported a 57% jump in consolidated profit for the March quarter to Rs 1,176 crore compared with Rs 748 crore profit in the same quarter last year. Consolidated assets under management rose 41% to Rs 1.1lakh crore.

Upside View

“In a tough environment for NBFCs, BAF continued to grow AUM by over 40%, grew revenues faster, and maintained good asset quality,” said Morgan Stanley. The firm has retained ‘equal-weight’ citing steep valuation.

Jefferies has increased earnings estimates by 8% for FY20 and FY21.

“Strong growth in new customers, expanding cross sell base, along with product and geographic expansion should drive strong, sustainable loan growth… Solid earnings growth and returns should support premium valuations,” said Jefferies.

Source: Economic Times