Bajaj Fin Serv

Bajaj Fin Serv
Price target: Rs737
Current market price: Listing on May 26, 2008
Key points
The activities of Bajaj Finserve include the wind farm business and the financial services business. It has two insurance subsidiaries, dealing in life insurance and general insurance. For FY2008, Bajaj Finserve has reported consolidated sales of Rs12,225 crore and a consolidated net loss of Rs32.7 crore.
* The gross written premiums of Bajaj Allianz Life Insurance grew by 82% from Rs5,340 crore to Rs9,730 crore in FY2008. The new business premiums achieved a growth of 56%. The New Business Achieved Profit margin was maintained at 20%. The loss after transferring Rs295 crore to the policyholders account stands at Rs214 crore.
* The gross written premiums of Bajaj Allianz General Insurance grew by 43% to Rs258 crore.
* The growth in the New Business of Life Insurance has been lower than our expectations. We expect the slow down to continue in the current year also and consequently we are downgrading our estimates from the insurance business.
* We except the company to get listed at around Rs700per share.
Bajaj Fin Serv.s valuation table
Life Insurance 612.9 At 26% stake
General Insurance 53.6 At 50% stake
Auto Financing 15.3 At CMP with 50% holding co. discount
Cash 55.3
Value (Rs) 737.0