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Yes Securities Report
We cut FY25/26 earnings by 2%/5% mainly on increasing the credit cost assumption. Given that flows into the early buckets have stabilized, incremental risk on current credit cost and growth expectations appears low.
On consolidated basis, we expect Bajaj Finance Ltd. to deliver 22-24% earnings growth on 24-25% AUM growth over FY24-27 with average RoA/RoE of 4%/21%. Bajaj Finance has exhibited resilience in growth and profitability through various phases of competition, credit cycles and liquidity conditions.
Stock is trading at palatable valuation (16 times PE and 3.1x P/BV on FY27) and further indications of credit cost stabilisation would re-rate Bajaj Finance.
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