>Bajaj Finserv Ltd

WHAT’S CHANGED…
PRICE TARGET....................................................................................................Unchanged
RATING...............................................................................................................Unchanged


Income, profit both up 51% YoY…
Bajaj Finserv continued its strong profitability trend with consolidated PAT of | 195 crore surging 51% YoY for Q1FY12. Considering the slower quarter, the PBIT performance has been strong for both insurance businesses. Retail financing also delivered profit growth of 53% to | 139 crore. The windmill business also exhibited profitability strength growing 33% to | 17 crore at the PBT level. Consolidated return ratios remained strong with ~30% RoE.


We maintain our HOLD rating on the stock with SoTP target price of | 716, considering it is a direct play on the insurance sector and NBFC. All subsidiaries contributing to quarterly performance


Consolidated gross revenues increased 12% YoY to | 3252 crore while consolidated income from operations jumped 51% to | 927 crore. Due to a 12% dip in GWP from life insurance and strong 22% jump in general insurance GWP, revenue growth was slower while income was higher as PBT of life and general insurance remained strong in Q1FY13. The finance business has growth rapidly with AUM growth of 60% YoY to | 14485 crore while profit grew a strong | 139 crore. On a segmental basis, it contributed 50% of Q1FY13 consolidated PBT. Plans for fund raising by Q3FY13 of ~| 750 crore for Bajaj Finance and | 500 crore (vs. | 1000 crore approved) for Bajaj Finserv have been incorporated in estimates.

RISH TRADER