Bajaj Finance’s Strategic Acquisitions and Cross-Selling Poised for Strong Growth in FY24, Says Motilal Oswal
Motilal Oswal Financial Services reaffirms its optimistic stance on Bajaj Finance, highlighting the lender’s ambitious goal of becoming an all-encompassing financial services provider across diverse consumer touchpoints.
Bajaj Finance is aiming to establish a dominant presence in physical locations, app-based platforms, web interfaces, social media channels, and virtual spaces.
Analysts at Motilal Oswal emphasize that the linchpin of Bajaj Finance’s omnichannel strategy lies in its comprehensive payments solutions, which are expected to boost customer engagement and retention on the company’s innovative digital platforms.
In the current fiscal year, Bajaj Finance is geared up to expedite the execution of its omnichannel strategy by extending its reach through the establishment of an additional 400-450 locations nationwide. This strategic expansion is anticipated to result in a significant upswing in business volumes, an elevated customer experience, and a more cost-efficient operational framework.
Bajaj Finance foresees several benefits from this strategic move, including increased customer acquisition, enhanced customer loyalty, expanded cross-selling opportunities, and improved profit margins.
The “acquire and cross-sell” approach, spanning payments, loans, deposits, insurance, and investments, which is grounded in Bajaj Finance’s experience of lower credit risk among existing customers, is poised to be a pivotal growth driver in FY24, according to the broking firm.
Building on this strategy, Motilal Oswal models an asset under management (AUM) compound annual growth rate (CAGR) of approximately 29 percent from FY23 to FY25E, with a goal of achieving a sustainable Return on Equity (RoE) of 25 percent.
The stock receives a “buy” rating from Motilal Oswal, with a target price set at Rs 8,800, based on a valuation of 6.5 times the FY25E book value per share. As of 9:30 am, the stock was trading at Rs 7,322.05 on the National Stock Exchange (NSE), marking a 0.89 percent decrease from the previous close.
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