Bajaj Finserv Ltd. share price target

Improvement in Underwriting Performance, Strong Deposits and Existing Customer Franchise Loan Growth Spurred theMomentum

Bajaj Finserv delivered a healthy performance in terms of topline across segments. A tax rate cut has supported growth in earnings. The only hit was higher claim in general insurance offset by higher investment income. Premium accretion in general insurance remained healthy with growth at 27% YoY to | 4279 crore, primarily led by crop insurance. Excluding crop insurance, premium growth at 14% YoY to | 2550 crore. Claim ratio came higher at 75% led by claim from Maharashtra and Kerala. Accordingly, combined ratio increased to 102.7% in Q2FY20 vs. 97.2% in Q2FY19. Thus,...

Cautious sails in high winds: The sustained strong performance underscores BAFs (Bajaj Finance) ability tofind new and little-explored lending opportunities and perfectly execute its strategy.

Rs 97.48 crore in the quarter ended June 2019. Total revenues during the quarter jumped by 40 per cent to Rs 12,271.66 crore, as against Rs 8,770.67 crore in the year-ago period During this quarter, the tight liquidity conditions witnessed in the aftermath of a default by IL&FS; did not show signs of abatement and companies with stronger balance sheets were...

Strong business model reporting underwriting profit with <100% combined ratio & extensive retail focus, enables general insurance segment to report RoE>24%. Premium accretion in general insurance remained healthy with growth at 17% YoY to | 2843 crore. Claim ratio came in higher at 72.8% led by cyclone Fani (| 30 crore) which impacted eastern coast. Accordingly, combined ratio increased to 103.1% in Q1FY20 vs. 90.2% in Q1FY19. Thus, higher claims and opex led to meagre under writing profit of | 9 crore. Provision for impairment of | 176 crore (| 50 crore after tax), ~60% of...

The lending subsidiary Bajaj Finance Ltd (BFL) continued with its strong performance trend and posted strong numbers for Q4 FY19, with net interest income rising by 43.6% y-o-y to Rs. 3395 crore. Net profit jumped by 48.7% y-o-y to Rs. 1176 crore. Assets under management (AUM) grew at a healthy 41% y-o-y, driven by rural and consumer loans. Despite the scorching...

Bajaj Finserv's delivered healthy performance in terms of topline at 43.5% YoY to | 12995 crore, led by healthy traction in all the segments. On earnings, commercial finance continued to report healthy growth trajectory, profitability of general & life insurance business remained subdued. Strong business model reporting underwriting profit with <100% combined ratio & extensive retail focus, enables general insurance segment to report RoE>24%. Premium accretion continued to remain strong at 23% YoY to | 3402 crore. Excluding non-crop insurance, GWP grew 17% YoY to | 2551...

Bajaj Finserv, a financial conglomerate under flagship brand of Bajaj, leadership of Sanjeev Bajaj, saw a sharp surge in earnings in all three business segments. General insurance is the most profitable & efficient among peers. Bajaj Finance, a niche consumer durable lender, reported earnings growth at 33-36% CAGR. BALIC enjoys a market share of ~6%. It is a strong business model with RoE>24%, reporting underwriting profit on <100% combined ratio & extensive retail focus, enabling market share of ~7.1% in gross written premium (GWP). Prudent underwriting with...

Bajaj Finserv delivered healthy top-line performance; however, earnings were below estimate, due to insurance business impact. Consolidated revenue grew 17.3% YoY to | 9698 crore, primarily led by finance and GI business. Consolidated PAT was flat YoY at | 704 crore, due to moderate profitability insurance business Continued strong growth at 38% YoY in AUM led 40% YoY growth in topline. Asset quality continued to remain broadly stable. Exposure to IL&FS; reported at ~| 225 crore, adequately secured against property...

Strong performance by BAF offsets weak quarter for BAGIC; BALIC on track Bajaj FinServ reported consolidated PAT of INR 7.0 billion, up 1% YoY as the strong performance in Bajaj Finance (IndAS PAT up 55% YoY in 2QFY19) was offset by a) Kerala flood losses at BAGIC which negatively impacted combined ratio by 360bps and b) investment related provisions and losses at BALIC which negatively impacted shareholders' net income. A key point to note is that Bajaj FinServ continues to be a debt-free company with surplus liquidity (ex-group investments) at INR 8.4 billion as of Sep'18. All three of Bajaj FinServ's (BJFIN) businesses are well-poised to post strong profitability going forward. We...