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Expanding ECLGS by Rs 1.5 lakh crore will provide much-needed support to vulnerable segments of the economy, particularly small and mid-sized companies, to tide over the current crisis. Representative Image

Ever heard of getting a return of over Rs 2 crore from just an investment of Rs 10,000? Dalal Street has seen many gems, which have made investors crorepati over a period of time. One such stock is Bajaj Finance. The share price of the company has rallied 2,16,466%, or 2,165 times, to Rs 5,484.75 during the past 20 years. The adjusted share price of the scrip was around Rs 2.53 in April 2001. On the other hand, the BSE Sensex has gained 1,354 during the same period.

Performance

Analysts on Dalal Street are bullish on the company despite rising uncertainty due to the Covid-19 pandemic. The NBFC major on April 27 posted a 42% growth in consolidated net profit at Rs 1,347 crore for the fourth quarter ended March 31. The company’s net profit stood at Rs 948 crore in the January-March period of the preceding fiscal year 2019-20. On the other hand, profit after tax of Bajaj Finance declined 16% in FY21 on the back of aggressive cleanup stress due to Covid.

The scrip is known for outperforming the benchmark equity indices. For instance, Bajaj Finance rallied 139% during the past one year, while Sensex has gained 52%. Likewise, the company has soared 7,963% in 10 years against 160% growth registered by the index. At present, JM Financial has a ‘Buy’ rating on Bajaj Finance with a price target of Rs 5,750.

“Given higher preparedness due to experience of the first Covid wave and barring national lockdown, simultaneous 3-5 weeks lockdown in 3-4 large GDP contributing states and another moratorium on loan repayment, the management is confident of delivering its FY22 guidance,” JM Financial said.

The consolidated net profit of the company has seen an annualised growth of 30% during the past six years. Bajaj Finance posted a net profit of Rs 4419.82 crore in FY21 against Rs 897.88 crore in FY15.

Brokerages views

Emkay Global Financial Services said, “We moderate our AUM growth estimates to 25% and 28% for FY22 and FY23 from 28% and 30% previously due to current lockdowns.” On the other hand, brokerage Motilal Oswal upgraded the stock to ‘Buy’ with a price target of Rs 5,865.

“The management is positive about delivering on long-term target metrics in FY22 (AUM growth of around 25%; RoE of around 20%) -provided there are no large-scale lockdowns,” Motilal Oswal said.