Bajaj Finserv: Upside of 74%; Buy

Jainam Research | Feb. 4, 2019, 12:46 p.m.

Recommendation

BFL is deposit accepting NBFC. BFL has excellent net NPA at 0.38% which is much lower than its peers. RoA has increased from 2.62% in FY14 to 3.38% in FY18, RoE is growing from 18.71% in FY14 to 20.46% in FY18.It has maintained its capital adequacy according to RBI guidelines of above 15%, currently at 24.71%. PAT is increasing at CAGR of 28.52%. BFL is showing continuous growth in each of the segments.Its loan book is also increasing at 35.91% CAGR in last 4 years. If we see combine valuation of all companies, expected return of Bajaj Finserv in best scenario is 74% and 51% return in worst scenario. So we consider this company as good investment opportunity. We recommend our investors to “BUY” the stock at CMP Rs 6009.8, currently trading at TTMP/E 31.2 with potential upside of 74% with horizon of 3 years.



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