Buy Bajaj Finance; target of Rs 7835: Prabhudas Lilladher

Prabhudas Lilladher's research report on Bajaj Finance

However our multiple stands reduced, as competition intensity remains high especially in consumer finance and mortgage segment along with company’s plan to enter into risky microfinance business. However re-rating can happen if company executes long range strategy framework and increase stickiness of new franchise customers. Maintain ‘BUY’.

Outlook

We maintain ‘BUY’ rating and reduce our TP to Rs 7,835 on (7x Sep’24E PABV) from Rs 8,953 (earlier:8.4x Sep’24E PABV) as we increase our FY23/24/25 NII estimates by 3.9%/1.9%/2.4%, given decrease in cost of funds from 7.5%/7.6%/7.7% to 7.2%/7.3%/7.4%. The impact of rate hikes on cost of funds is more gradual than anticipated.

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Bajaj Finance - 30 -01-2023 - prabhu