Synopsis
When its peers are trading below 24x PE, Bajaj Finance’s PE stands at 40x. To find if the stock’s current valuation is justified, ET Prime compared its implied ROE (PB/PE) to that of Nifty 50. While both have an implied ROE of about 20%, Bajaj Finance’s PBv is higher at about 8x against Nifty’s 4x.
“Bajaj Finance is no more a boat but has become a ship. The company got higher PE (price-to-earning) multiple because it was able to lend to people who did not want to borrow,” said a CEO of a mutual fund house, which had also invested a significant chunk of its AUM (asset under management) into the Bajaj Finance stock.Bajaj Finance, a non-banking financial company (NBFC) that was known as a consistent and stellar performer over the past 10
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