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May 14, 2013

Bajaj Finance Ltd. – Multibagger Analysis

by Futurecaps Advisor

Bajaj Finance Ltd. is a great stock which delivered more than 40 times returns in last 13 years.  We can check whether it has Ampere ahead based on our Intrinsic Valuations.

Website: http://www.bajajautofinance.com/

Brief: Bajaj Finance Limited is a financial services company that operates branches in India, which provide an assortment of financial services.

image

History of Consistently Increasing Sales, Earnings & Cash Flow image
Durable Competitive Advantage image
Future Growth Drivers image
Conservative Debt (long term debt < 3*Net Profit) image
Return on Equity must be Above Average image
Low CAPEX required to maintain current operations image
Management is holding / buying the stock image
Price is Under Valued (< intrinsic value) image
Stock Price is consolidating image

Intrinsic Value

4800.00

Current Market Price

1378 (CMP < Intrinsic Value, Very Good)

EPS Growth Rate

40% (Very High, Very Good)

ROE

24% (Above Average, Good)

 

Current Liabilities

1694 Crore (Raises a concern as it is little above 3 times latest net profit)

Stock Price Consolidation

The stock price is in the up-move as it is a Declared Blue Chip Multibagger.  But, considering PE around 12, Book Value Ration just 0.5, I see it as a Good Price to buy & add on declines.

Expected Returns

Taking average EPS Growth as 30% per year, PE Ratio @ 20, we can expect 20 Times returns in 10 years.

 

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