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Jefferies Starts Coverage of Bajaj Finserv With Buy, Flags 24% Upside

Jefferies attributes the upside to lower rates at Bajaj Finance, improving insurance margins, option value from new ventures.

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Overview

  • The brokerage initiated coverage on August 21 with a Buy call and an upside view of roughly 24%, with media reports citing target prices of Rs 2,240 and Rs 2,420.
  • Jefferies highlights tailwinds from falling rates for Bajaj Finance, profitability gains at Bajaj Allianz Life and General, and early-stage platforms that provide optionality.
  • It forecasts about 22% earnings CAGR at Bajaj Finance, expects roughly 23% loan growth over FY25–FY28 with NIM improvement, and sets a Rs 1,100 target on the NBFC.
  • Bajaj Finserv’s value case rests on its 51% stake in Bajaj Finance and roughly 74% stake in Bajaj Allianz that is seen rising to 75%, with most of the holding company’s valuation derived from the lending arm.
  • Shares rose more than 2% intraday following the call, while key risks flagged include aggressive expansion by Jio Financial Services, competition from public-sector players, and execution in loss-making new ventures.