Bajaj Finance Ltd. share price target

We maintain our BUY recommendation on the stock.

Bajaj Finance’s (Bajaj) Q1FY25 result has been largely in line except credit cost, which was higher-than-guided range. Credit cost increased to 2.12% (adjusted for management overlay utilisation stood at 1.99%) vs guidance of 1.75-1.85%.

Bajaj Finance (BAF) reported satisfactory results in Q1FY25, wherein AUM and PPoP were largely in line with consensus/our estimates.

BAF’s 1QFY25 reported PAT grew 14% YoY to ~INR39.1b (in line). NII grew 25% YOY to ~INR83.6b (in line).

BAF reported a mixed performance in Q1FY2025. Higher-than-expected NIM compression (down
25bps q-o-q) and elevated credit cost (1.9%, up 32bps q-o-q) led to lower earnings growth.

We reiterate our BUY recommendation on BAF, valuing the stock at 4.7x FY26E ABV to arrive at a target price of Rs 8,350/share, implying an upside of 18% from the CMP.

Bajaj Finance Ltd (BAF) reported strong business momentum in Q1FY25 and continued to beat its guidance (of 26-28%) for AUM growth.

BAF has announced that on 2-May-24 the RBI has communicated to the
company about removal of restrictions by the Regulator on BAF sanctioning and
disbursing new loans under its ‘eCOM’ and ‘Insta EMI Card’ segments
(restrictions put on 15-Nov-23) and suspension of issuance of EMI Cards to new
customers (on 17-Nov-23).

MSIL: Steady performance, but steep valuations; downgrade to HOLD. HUVR: Subdued performance; expect gradual recovery. BAF: Obstacles for a powerful player on a protracted journey. SBILIFE: Expect market dominance to continue. SI: In-line Q4FY24; pipe volume guided to grow at healthy rate in FY25. DALBHARA: Disappointments all over; but paving the way for growth. UTIAM: Core profit in line; maintain HOLD. GLS: Weak quarter; maintain HOLD

BAF reported a good set of numbers in Q4FY24, against the backdrop of RBI’s
embargo on EMI and Ecom cards which affected PBT by ~4%, largely meeting
Consensus estimates. Management gave guidance for FY25 AUM growth of ~26-
28% and RoA of ~4.6-4.8% of AAUM, with profitability improving in the second
half as the first half will see some moderation in NIM on account of elevated
borrowing cost.

Bajaj Finance (BAF)’s 4QFY24 reported PAT grew ~21% YoY to
~INR38.2b (in line), while FY24 PAT rose ~26% YoY to INR144.5b.

We maintain our BUY recommendation on the stock.

Bajaj Finance’s (Bajaj) Q4FY24 financial performance was mixed as AUM growth, new customer acquisition, asset quality
and operating efficiencies continued to trend as envisaged; continued stress in rural B2C and 21bps QoQ NIM contraction were dampeners.

We initiate coverage on Bajaj Finance (BAF) with a BUY recommendation and
Mar-25E TP of Rs9,000/sh (~23.4% upside), implying FY26E consolidated P/B
of 5.1x.

We maintain our BUY recommendation on the stock.

Consumer Goods: What production and price data of consumer goods say? TATA: UK transition and TSK2 to bolster growth; maintain BUY. BAF: Mixed quarter; maintain BUY. DALBHARA: Soft prices constrain growth