Bajaj Finance (BAF IN)

Bajaj Finance (BAF IN)

Rating: BUY | CMP: Rs3,266 | TP: Rs3,860

In a sweet spot

Shweta Daptardar shwetadaptardar@ | 91-22-66322245

Bajaj Finance

Contents

Page No.

Company Overview ............................................................................................... 5 Bajaj Finance ? a structural play ........................................................................ 5

BAF: diversified lending model .............................................................................. 6 BAF's Consumer lending to expand at 30% CAGR over FY19-21E............... 7

BAF's formidable play in consumer lending market ......................................... 10 Consumer credit growth intact ...................................................................... 10 Higher Bajaj Auto sales penetration to aid consumer lending ...................... 11 Distribution network to expand at 30% CAGR (FY19-21E) .......................... 11 Customer addition at 1 mn/quarter remains strong....................................... 12

Top quartile return profile ? edge over other NBFC ............................................. 17 Clear customer segmentation .......................................................................... 17 Fee-income to assets set to climb to 1.8% by FY21E ...................................... 19 Housing business spin-off: key RoA trigger ..................................................... 20 Why BAF would grow in mortgage finance segment? .................................. 21 Industry drivers stand in favor ................................................................... 21 How housing business spin-off is a win-win both for parent and the sub? ....... 22

Well placed in uncertain times ............................................................................. 24 BAF's liquidity position ..................................................................................... 24 BAF's matched ALM position ........................................................................... 24 BAF's diversified funding structure................................................................... 25 BAF's diligence on capital leverage ................................................................. 26 BAF's impeccable asset quality ( ................
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