Stocks to Buy Today: On 25 September 2023, the financial services firm Sharekhan Limited published the latest research report on Bajaj Finance shares, assigning a ‘buy’ rating to the stock. The comprehensive analysis also provides valuable insights into the company’s financial health.
Sharekhan Limited is Bullish on Bajaj Finance and has recommended a ‘buy’ rating on the stock with a target price of Rs 8800. Let’s take a closer look at their recommendations for the Bajaj Finance share price target set by Sharekhan Limited.
Sharekhan Limited Research Report: Bajaj Finance Share
Bajaj Finance (BAF) is set to hold a board meeting on 5 October 2023, with an agenda to ponder over raising equity capital via a Qualified Institutional Placement (QIP). This move is primarily geared towards fuelling the company’s growth ambitions.
Interestingly, the capital-raising initiative has surfaced earlier than anticipated. Historically, BAF has been known to raise equity capital when its leverage hovers around the 6.0x-7.0x mark. However, as of 30 June 2023, the firm’s leverage stands at a slightly lesser 5.2x.
According to the research report by Sharekhan, it’s conjectured that Bajaj Finance might raise an amount equivalent to 10-15% of its current net worth. In concrete terms, this could translate to a sum in the ballpark of Rs. 8,000 to 10,000 crore. If this prediction holds, there could be a 10-13% surge in the Book Value Per Share (BVPS) despite the impending equity dilution, based on projections for the fiscal year 2024.
The rationale behind this capital injection appears to be multifaceted. BAF is gearing up for a visible uptick in retail loan growth over the forthcoming two years. This anticipation is underpinned by their robust customer acquisition strategy and a keen focus on expanding their cross-sell franchise. The company aims to harness the power of data analytics and tap into its expansive distribution network via an omnichannel approach.
Moreover, the additional capital will also pave the way for launching new product segments sooner than their set timelines. Additionally, BAF is on the lookout for potential inorganic opportunities to further its growth.
This latest move by BAF is being perceived positively, with the street anticipating robust Asset Under Management (AUM) growth and strong earnings momentum.
Sharekhan’s research report maintains its earlier ‘Buy’ stance on Bajaj Finance. The target price remains unchanged at Rs. 8,800. As of now, based on the current market price (CMP) of Rs. 7,819, the stock is trading at 7.2x and 5.6x its estimated BV for FY2024 and FY2025 respectively. The firm’s diverse product offerings, combined with its omnipresent omnichannel strategy, digital transformation, and emphasis on customer acquisition and cross-selling, position it for significant AUM growth in the foreseeable future.
- CMP — Rs.7,819
- Target — Rs. 8800
- Type — Buy
- Report — Click Here
Company Details
| Market Cap (INR) | 4,73,780 crore |
| 52-week Range (INR) | 7,999 – 5,487 |
| NSE Volume (No. of Shares) | 9.6 lakh |
| BSE Code | 500034 |
| NSE Code | BAJFINANCE |
| Free Float (No. of Shares) | 26.7 crore |
Company Shareholding
| Promoters | 55.9 |
| FII (Foreign Institutional Investors) | 21.4 |
| DII (Domestic Institutional Investors) | 11.2 |
| Others | 11.5 |
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