Buy Bajaj Finserv for a target of Rs. 20,000 : ICICI Direct
Bajaj Finserv Q3FY22 Results: Resilient Credit Business, Weak Insurance Business
- Consolidated revenue increased by approximately 10.4% year-on-year; PAT decreased 2.6% YoY
- AUM up 26% YoY at Rs. 181,250 crore; PAT up 85% year-on-year, thanks to a low provision
- GWP decreased by 13% YoY to Rs. 2,959 crore; PAT stable year-on-year at Rs. 304 crore
- Robust 30% year-on-year growth in life premiums; high operating expenses impacted PAT
Bajaj Finserv ratings:
Bajaj Finserv’s certificate over the past 5 years has increased by around 5.2 times from around Rs. 3170 in Jan 2017 to Rs. 16333 in Jan 2022. of the 15% discount, Finserv brokerage value at ~39x FY24E EPS.
Main triggers of future price performance:
According to the brokerage lending business amid accelerated growth, the company’s profits will be triggered in the future. Additionally, the company’s abilities to quickly transition to an offline business model from an online presence will also boost its valuations. In addition, the company’s selective product line will drive premium and profit growth in the life and property and casualty business.
Choice of alternative actions in the financial space:
In the BFSI segment, ICICI is bullish on HDFC Ltd, which is a leading housing finance company with a loan amount of approx. 5 lakh crore with presence in life insurance, banking, AMC through its subsidiaries The brokerage recommends buying HDFC for a target price of Rs.3350. The last traded price of the share is Rs. 2528 per share on the NSE.
The stock is taken from ICICI Direct’s brokerage report dated January 24, 2022. Investing in stocks comes with the risk of financial losses. Investors should therefore exercise caution. Greynium Information Technologies, the author, and the brokerage are not responsible for any losses caused as a result of decisions made based on the article.