The valuations have become quite attractive. If I take the PE multiple based on FY12 expected earning, I am expecting an EPS of close to Rs 86-90. That means, the share is ruling at a PE multiple of seven times.
Bajaj Finserv holds 56% stake in the company and they have recently subscribed 60 lakh warrants which will get converted at Rs 651. Q1 results have been quite robust for Bajaj Finance with a topline of Rs 450 crore and PAT of Rs 91 crore, translating to an EPS of Rs 25.
Upon peer comparison with companies of same size such as Mahindra and Mahindra Finance and Shriram Tranport , I think this stock looks quite attractive. In fact, a positive view is maintained on all the three stocks I mentioned in spite of them looking expensive.
Nonetheless, Bajaj Finance is looking like it should be able to move to Rs 800 in the next 8-10 months.
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