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Investing.com - CLSA has raised its price target on Bajaj Finance (NSE:BJFN) Ltd. (BAF:IN) to INR1,150.00 from INR1,100.00 while maintaining an Outperform rating.
The research firm cited Bajaj Finance’s healthy 25% assets under management (AUM) growth despite the current credit slowdown environment, particularly in the retail sector where the company predominantly operates.
CLSA noted that while net interest margin (NIM) moderated 10 basis points quarter-over-quarter optically, it remained stable when adjusted for an accounting technicality. The expense ratio showed improvement, though core credit costs were a few basis points higher at 2%.
After what CLSA expects to be a relatively slow FY25, the firm projects Bajaj Finance to deliver a 25% profit after tax (PAT) compound annual growth rate over the next two years. The price target increase from INR1,100 to INR1,150 was attributed to a lower cost of equity.
The stock has risen nearly 40% year-to-date, with CLSA believing most of the rerating is complete and future share price movement should reflect earnings growth. Bajaj Finance remains CLSA’s top pick, described as a "lean, mean, compounding machine."
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