Sharekhan's research report on Bajaj Holdings & Investment
Bajaj Finance (its lending arm) continues to deliver sector leading growth and return ratios. It derives benefits from a diverse loan portfolio, wide distribution network, effective execution, and a strong management team. We are confident about its strong sustainable earnings growth and longevity of the franchise. BFS’s insurance business is also witnessing strong traction, led by well-diversified product portfolio and multi-channel distribution network. Lending and insurance businesses are offering a structural growth opportunity due to large under penetration.
Outlook
BHIL’s performance depends upon the performance of its key group companies, which ultimately drive its valuations. Most of the key associates and subsidiaries are performing well. We believe a healthy outlook for all the businesses would drive strong earnings growth resulting in a healthy dividend income for BHIL. We maintain our BUY rating on BHIL with a revised SOTP-based PT of Rs. 10,181, factoring the upside in valuations of its key associate companies.
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