Prabhudas Lilladher issued a buy rating for Bajaj Finance with a target price of Rs 1150. The firm said AUM grew 26.5% year-on-year to INR 5,846.2bn. Strong momentum in mortgages and consumer finance helped this growth. Experts believe the company has a strong balance sheet and remains confident about credit costs.
Prabhudas Lilladher's research report on Bajaj Finance AUM grew 26.5% YoY to INR5,846.2bn driven by strong momentum across mortgages and urban/ rural consumer finance, while MSME growth is expected to recover in H2FY27. We build AUM growth of 26%/25% for FY27/FY28E in-line with management guidance. NIM (calc.) moderated to 9.5% and is likely to face marginally higher compression than earlier guidance (10-15bps) amid rising funding costs. Fee-income growth is expected at 15-18% over the medium term, with final regulations on insurance commissions and revolver loans remain key monitorables. Despite sequential asset quality deterioration, partly due to temporary shorter-tenor gold loan schemes, management remains confident of the credit cost outlook. We factor in credit cost of ~1.6% for FY27E. Additional provisioning buffers and the proposed INR175bn capital raise strengthen balance-sheet resilience. Outlook We retain our P/ABV multiple of 4.0x Sep'28E, arriving at a TP of INR1,150. Sustained growth, resilient asset quality and a strong balance sheet profile underpin our positive view. Reiterate BUY. For all recommendations report, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions. Bajaj Finance - 2110026 - prabhu