Buy Bajaj Finance; target of Rs 9000: Emkay Global Financial

Emkay Global Financial’s research report on Bajaj Finance

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. Company has addressed the deficiencies in the process that led to the RBI embargo and has formally requested the Regulator to remove the ban.

Outlook

Overall, we see BAF progressing well on its Long Range Strategy (LRS) targets. To reflect the Q4 developments and Management guidance, we slightly tweak our estimates, leading to around (3%)-1% PAT change in FY25E-27E; we reiterate our BUY rating on BAF with unchanged Mar-25E TP of Rs9,000/sh, as our thesis remains intact.

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Bajaj Finance – 26042024 – emkay