Buy Bajaj Finance, target price Rs 8,500: ICICI Securities
ICICI Securities has a buy call on Bajaj Finance with a target price of Rs 8500. The current market price of Bajaj Finance is Rs 6651.1. Bajaj Finance., incorporated in 1987, is a Large Cap company with a market cap of Rs 411672.79 crore, operating in NBFC sector.
Bajaj Finance's key products/revenue segments include Interest, Fees & Commission Income, Other Operating Revenue, Income From Sale Of Share & Securities and Service Charges for the year ending 31-Mar-2024.
Financials For the quarter ended 30-09-2024, the company has reported a Consolidated Total Income of Rs 17095.41 crore, up 6.17% from last quarter Total Income of Rs 16102.31 crore and up 27.75% from last year same quarter Total Income of Rs 13381.75 crore. The company has reported net profit after tax of Rs 4010.29 Crore in latest quarter.
Investment Rationale
Bajaj Finance (BAF) ended its eight-year-long co-branded credit card partnership with RBL, as per exchange filing (Link). ICICI Securities believes the possible factors behind the end of this partnership include: 1) BAF?s decision to exit the co-branded credit card business given the role of the originator being restricted to only marketing and distribution, without customer ownership. 2) BAF?s strategy to diversify its fee income pool by reducing over-reliance on credit card fees. 3) Monthly RBL co-branded card acquisition volumes were 30,000?40,000? negligible for its overall P&L size. Considering co-branded RBL card fee income contribution at negligible ~1% of PBT, as per our calculation,
