ICICI Securities Says Buy This Financial Firm Stock For A Target Price Of Rs 18,900

Bajaj Finserv (Finserv) with a market capitalization of Rs 4,01,688 Crore is a financial conglomerate. The company has holdings in the life insurance (Bajaj Life Insurance), financing business (Bajaj Finance), and general insurance (Bajaj General Insurance) business. The ICICI Direct, the brokerage firm has put a buy rating for a target price of Rs 18,900 for a period of 12 months.

What should investors do?

The company is continuing with a customer-first strategy and new product launches to provide a better experience and gain market share. Furthermore, they will use new launches, customer addition and upscaling i.e. selling more products to an existing customer. Geography enlargement is also under process. The brokerage firm says, "Bajaj Finserv's share price has grown by over~5x in the past five years (from ~ Rs 3170 in January 2017 to Rs 14772 in May 2022)."

Q4FY22 Results:

Pick-up in lending AUM & premium accretion aided topline.

• Consolidated revenue grew ~22.6% YoY; PAT up 37.3% YoY.
• AUM up 29% YoY to Rs 197452 crore; PAT jump led by the lower provision.
• GWP declined 18% YoY to Rs 3300 crore; PAT lower at Rs 248 crore.
• Robust growth at 30% YoY in life premium; new business strain impact PAT.

Target Price and Valuation

The brokerage firm stated, "Given a pick-up in finance business and anticipated healthy growth in insurance segment, we remain positive. Increasing discount to 20%, we value Finserv at ~36x FY24E EPS and lower our target price from Rs 20000 earlier to Rs 18900/share." ICICI securities says, Healthy traction in all businesses to drive consolidated revenue & earnings. It added, "We maintain our BUY rating on the stock."

Disclaimer

The stock has been picked from the brokerage report of ICICI Securities. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.