IIFL Capital has recently resumed its coverage of Bajaj Finserv, assigning it an ‘Add’ rating along with a 12-month target price of ₹1,900 per share. This forecast suggests a potential upside of approximately 5% from current valuations, driven by a robust growth outlook for the company. IIFL Capital highlights that Bajaj Finserv’s insurance divisions are strategically positioned to capitalize on the expanding opportunities in the underpenetrated insurance market.

Growth Prospects for Bajaj Finserv’s Insurance Subsidiaries

The latest analysis from IIFL Capital emphasizes that Bajaj Finserv’s insurance segments have consistently outperformed the industry in terms of premium growth while sustaining a solid market presence. They suggest that these subsidiaries are well-equipped to tap into the prevailing growth trends within the insurance sector, paving the way for increased profitability.

• Strong Premium Growth: Bajaj Finserv’s insurance arms are witnessing premium growth that surpasses industry averages.
• Market Position: The company maintains a healthy share in the insurance landscape.

Future Earnings Projections for Bajaj Finance

Looking ahead, IIFL Capital anticipates that Bajaj Finance will show an impressive 24% compound annual growth rate (CAGR) in earnings per share (EPS) from now until FY27. The report notes that, after applying a 20% holding company discount to its various assets, including health and asset management businesses, they project a 5% upside for the stock. Notably, Bajaj Finance’s implied holding company discount within Bajaj Finserv currently stands at 26%, slightly below its 8-year average of 28%.

Insights on Bajaj Alliance General Insurance

IIFL Capital expects Bajaj Alliance General Insurance to achieve a 16% CAGR in gross direct premium income (GDPI) from FY25 to FY27. This growth is likely to be fueled by strong performance in both the health and commercial sectors. They predict an enhancement in the combined ratio by 230 basis points during the same timeframe, attributed to improved loss ratios in the motor and health segments.

Performance Outlook for Bajaj Alliance Life Insurance

The strategic focus on achieving profitable growth within Bajaj Alliance Life Insurance is another noteworthy aspect highlighted by IIFL Capital. With a remarkable 31% growth in Individual Rated New Business (IRNB) premiums, the company is outpacing industry averages, which stand at 12% and 16% for private players. This renewed emphasis on profitability, particularly through an increased share of traditional insurance products, positions Bajaj Alliance favorably.

Recent Stock Performance

Despite a 1.5% decline in intra-day trading, Bajaj Finserv has experienced a 17% increase in share price so far in 2025. However, in the past month, the stock has dipped nearly 3%. The anticipated recovery in Bajaj Finance’s earnings is expected to further bolster Bajaj Finserv’s growth trajectory, making it a stock worth watching.

In conclusion, with its strong market positioning and promising growth forecasts, Bajaj Finserv appears set for a positive trajectory in the coming months. Investors should keep an eye on these developments as they could significantly impact the company’s performance.