Shares of Bajaj Finance gained over 5 percent to hit its record high of Rs 3,282 on Friday after the company reported strong March-quarter earnings. The company reported a 57 percent jump in its fourth-quarter consolidated net profit at Rs 1,176 crore as against Rs 748 crore in a year ago period. Global brokerages like Morgan Stanley, Deutsche Bank, Credit Suisse, and Jefferies have also increased their target price for the stock for a 12-month period.
Bajaj Finance’s stock price gained as much as 5.4 percent to hit an all-time high of Rs 3,282 per share on the BSE. At 10:55 am, the stock was trading 5 percent higher at Rs 3,267.70 as compared to a 0.57 percent (211 points) rise in BSE Sensex at 37,609. The stock had risen nearly 9 percent post its Q4 earnings yesterday.
For the fiscal year ended March 2019, the net profit rose to Rs 3,890 crore as compared with Rs 2,485 crore in 2017-18. The company’s board has recommended a dividend of Rs 6 per equity share or 300 percent of the face value of Rs 2.
Total income during the January-March quarter of 2018-19 rose to Rs 4,887.76 crore from Rs 3,424.99 crore in the year-ago period, the company said in a regulatory filing. Net interest income (NII) was also up 50 percent at Rs 3,395 crore versus Rs 2,265 crore.
Credit Suisse maintained an ‘underperform’ rating for the stock and raised its target price to Rs 1,930 from Rs 1,660 per share on a good set of numbers. It has also raised the company’s EPS by 4-6 percent for FY20-21, however, believes that the premium multiples of the company may not sustain.
Morgan Stanley raised earnings estimates as the company continued to grow AUM by over 40 percent in a tough environment. However, it stays ‘equal-weight’ on the company given its steep valuations but raises the TP to Rs 2,950 from Rs 2,600.
Deutsche Bank also maintained its ‘hold’ rating on the stock but increased its TP to Rs 2,700 from Rs 2,400. Jefferies, on the other hand, had a ‘buy’ rating for the stock with a target of Rs 3,600 (from Rs 3,100 earlier). Solid earnings growth and returns should support the premium valuations, Jefferies added in a note.