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Shares of Bajaj Finserv rose nearly 2 per cent to Rs 1,998.75 in Thursday morning trade after global brokerage Jefferies initiated coverage on the Nifty blue-chip with a ‘Buy’ rating and a target price of Rs 2,420, implying a 23 per cent upside from current levels.

Jefferies believes the company is well-positioned to benefit from multiple tailwinds, including lower interest rates at its lending arm Bajaj Finance, improving profitability in both life and general insurance segments, and the scaling of new ventures in mutual funds, healthcare, and tech.

“We see limited impact from the exit of Allianz and the entry of Jio Financial Services,” Jefferies said in its note, adding that Bajaj Finserv is expected to deliver core earnings growth at a CAGR of 22 per cent during FY25–28.

Bajaj Finserv currently holds:

51 per cent stake in Bajaj Finance (BAF)

74 per cent each in Bajaj Allianz General Insurance (BAGIC) and Bajaj Allianz Life Insurance (BALIC)

Following Allianz’s exit, Bajaj Finserv’s stake in the insurance arms will increase to 75 per cent, with the remaining interest held by a group entity.

Bajaj Finance’s loan book is estimated to grow at a CAGR of 23 per cent over FY25–28 supported by lower rates.

BAGIC’s profit to grow at 14 per cent CAGR

BALIC’s VNB margin to expand at 23 per cent CAGR

Jefferies also highlighted potential long-term gains from new ventures such as Bajaj Asset Management, Bajaj Finserv Health, and Bajaj Finserv Direct. These businesses are currently in early stages and loss-making, but present substantial upside.

The AMC business alone is valued at Rs 26 billion (or Rs 16 per share), based on 4 per cent of projected AUM by September 2027.

“The opportunity in healthcare, tech, and other early-stage segments is significant and can be monetised through effective execution and cross-selling,” the report said.

Jefferies sees Bajaj Finserv as a well-diversified financial powerhouse, relatively insulated from economic cycles and poised to benefit from structural tailwinds across lending, insurance, and new-age digital platforms.

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Senior Sub-editor at Zee Business English

shweta.shukla@India.com

Shweta Birendra Shukla is a journalist covering the stock market and corporate affairs, with prior stints at Business ...LATEST NEWSBy accepting cookies, you agree to the storing of cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts.