KRChoksey Research and ICICI Direct are impressed by Bajaj Finserv's over 20% rise in revenue at ₹21,755.3 crore.

The Bajaj Finserv Analyst: Analysts at ICICI Direct led by Kajal Gandhi upgraded their rating from ‘hold' to ‘buy' with a revised target price of ₹1,625, an almost 21% upside from the current price of around ₹1,337. 

Abhishek Agarwal of KRChoksey Research maintained the ‘buy' rating for the stock but downgraded the price target from ₹1,943 to ₹1,800.

The Bajaj Finserv Thesis: The non-banking finance company reported a 41.9% increase in its net profits at ₹ 1,782 crore this quarter compared to the year-ago period.

Analysts at ICICI Direct attributed the strong Q3 numbers to healthy performance in the lending arm of the business. KRChoksey also said that the soaring numbers were "led by its lending & life insurance businesses."

ICICI Direct also noted that the company's assets under management (AUM) grew by around 27% to ₹230,842 crore. KRChoksey, in its research note, observed that the AUM growth was slower in this quarter compared to the first and second quarters. This was a result of "lower growth in the mortgages segment due to intense pricing pressures," the analysts added.

Going forward, KRChoksey noted, the management remains confident of growing AUM by 25%-28% through "its omnipresence strategy & aggressive acquisition of customers."

ICICI Direct reiterated the AUM growth point and added that it expects the company to boost profitability based on the AUM growth, the company's digital transformation, and client additions.   

Analysts at KRChoksey estimate that "robust lending growth and improving growth trajectory in insurance businesses will be a favorable trigger" for strong consolidated earnings going forward.

Price Action: Shares of Bajaj Finserv were trading 5.19% higher at ₹1,338.0 in the late hours of trading on Friday.

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