The money of investors of Bajaj Finance becomes 5 times in 5 years. Should you buy or hold?

The share price of Bajaj Finance has risen almost 7.2x in the last five years, approx. ₹Around 1,100 levels in September 2016 ₹At the level of 7800 in September 2021. On the other hand, the share price of Bajaj Finserv has increased almost 6 times in the last five years, i.e. ₹2,900 to hover around in September 2016 ₹18,000 per share at present.

ICICI Securities has retained its ‘Buy’ rating on Bajaj Finance stock. “We remain positive and factoring in higher NIMs with risk-adjusted growth, we value the stock at ~10x P/ABV on FY23E and revise our target price ₹8950. From ₹6900 ago. The premium valuation remains unchanged,” said a brokerage note on Bajaj Finance.

Meanwhile, it has raised its rating on Bajaj Finserv stock from hold to ‘Buy’ and raised the target price to ₹20,200 per share. From ₹13,500 ago. It sees strong premium growth and select product mix to aid business growth and earnings in the life and general insurance business as key triggers for future price performance.

Bajaj Finance is a major player in the consumer finance space, while it has also forayed into several other lending sectors such as housing, SME loans, etc., as and when opportunities have arisen. The transition from being a pure lender to fin-tech as per ICICI Securities to further drive valuations and a lean operating model and strong growth guidance to act as key triggers.

Bajaj Finserv is a financial conglomerate with holdings in the financial business (Bajaj Finance), life insurance (Bajaj Life Insurance) and general insurance (Bajaj General Insurance) businesses. The brokerage said its consistent, fast business growth and profitability remain in focus.

The views and recommendations given above are those of individual analysts or broking companies and not of Mint.