Hold Bajaj Finance, target price Rs 5200: Emkay Global

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Hold Bajaj Finance, target price Rs 5200:  Emkay Global


Emkay Global has hold call on Bajaj Finance with a target price of Rs 5200. The current market price of Bajaj Finance Ltd. is Rs 5148.

Bajaj Finance Ltd., incorporated in the year 1987, is a Large Cap company (having a market cap of Rs 308283.68 Crore) operating in NBFC sector.

Financials
For the quarter ended 31-12-2020, the company reported a Consolidated sales of Rs 6614.60 Crore, up 2.07 % from last quarter Sales of Rs 6480.35 Crore and down -5.65 % from last year same quarter Sales of Rs 7011.05 Crore Company reported net profit after tax of Rs 1145.98 Crore in latest quarter.


Investment Rationale
The brokerage increases FY21E/22E/23E EPS by 17%/15%/8% and realign riskfree rate to 6% (from 7.5% earlier) and terminal growth rate to 5% from 3% earlier. It revises TP to Rs 5,200 (Rs2,950 previously), corresponding to ~6.1x FY23E Adj Book. It will be keeping an eye on 1) possible stress in the flexi loan book, 2) RBI’s regulatory norms for NBFCs, and 3) BAF’s transformation journey

Promoter/FII Holdings
Promoters held 56.1 per cent stake in the company as of Dec 30, 2020, while FIIs held 23.9 per cent, DIIs 9.1 per cent and public and others 10.9 per cent.





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