Buy Bajaj Finance, target price Rs 6900: Motilal Oswal

Motilal Oswal has buy call on Bajaj Finance with a target price of Rs 6900. The current market price of Bajaj Finance is Rs 6146.95. Time period given by analyst is one year when Bajaj Finance price can reach defined target.

Bajaj Finance Ltd., incorporated in the year 1987, is a Large Cap company (having a market cap of Rs 369756.63 Crore) operating in NBFC sector.

Financials
For the quarter ended 31-03-2021, the company reported a Consolidated Total Income of Rs 6854.94 Crore, up 2.95 % from last quarter Total Income of Rs 6658.47 Crore and down -5.20 % from last year same quarter Total Income of Rs 7230.83 Crore. Company reported net profit after tax of Rs 1346.64 Crore in latest quarter.


Investment Rationale
The severity of the COVID second wave impact on earnings has been much lower v/s the first wave. The management is well-prepared to deal with this and compensate for lost business with the start of the unlocking process. Digital initiatives have been upfronted and are likely to provide significant benefit on the cost and growth fronts. The cross-selling of products to the existing Credit segment customer base of ~39m would be a key growth driver in FY22 as well. BAF’s return ratios have not only been consistent but are also the highest in the Coverage Universe (after that of gold financiers).

Promoter/FII Holdings
Promoters held 56.1 per cent stake in the company as of March 31, 2021, while FIIs held 24.2 per cent, DIIs 9.1 per cent and public and others 10.6 per cent.