Bajaj Finance share price correction provides attractive entry point, says Emkay Global; sees 23% upside

livemint.com:

Bajaj Finance share price target of ₹9,000 per share, implying an upside of 23.4% from Monday’s closing price. Emkay Global’s positive stance on Bajaj Finance shares is underpinned by three factors.

Firstly, it believes that Bajaj Finance’s journey over the last one & a half decades has been a hallmark of near flawless execution of its 3i strategy (Invention, Innovation and Imitation) amid a number of external turbulences, shocks and disruptions. “Notwithstanding niggling issues in the past few years, Bajaj Finance has continued to deliver growth (AUM and Customer Franchise) and profitability (RoA/RoE) in line with or better than its ‘Long Range Strategy’ (LRS) and far superior than lending peers, despite reaching its current size and material exposure to mortgages," said Avinash Singh, Senior Research Analyst at Emkay Global in a note.

Also Read: Hatsun Agro share price surges 15% after Q4 result; profit doubles, EBITDA jumps 47% YoY Regarding recent issues and overhangs, the company has addressed the deficiencies in processes that led to the RBI ban on E-com/EMI cards; the Bajaj Housing Finance IPO is likely to come up within a year, and the recent Management reshuffle & hiring has granted clarity on Management succession and transition of MD Rajeev Jain, he added. Bajaj Finance has proactively added new product offerings to its already wide product portfolio and the newer product lines are likely to eventually post ~6-7% consolidated AUM over the coming 5 years, and offset any pressure on consolidated yields resulting from the increasing mortgage in the AUM mix.