Buy - Bajaj Finance, Larsen and Toubro Infotech: Sharekhan

Sharekhan’s research report on Bajaj Finance

Bajaj Finance Limited’s (BFL) Q3FY2021 results were mixed; operational numbers came largely in line with estimates. Asset quality improved on a q-o-q basis but continued elevated provisions (for Stage 1 and 2 loans) were dampeners. Management commentary on growth and asset-quality outlook are now more sure-footed; business transformation is encouraging for the long term…

Outlook

We maintain our Buy rating on the stock with a revised price target (PT) of Rs. 6,000.

Sharekhan’s research report on Larsen & Toubro Infotech

Strong quarter, with beat in EBIT margin and net profit. Company reported record-high large deal win TCVs, healthy deal pipeline, new logo additions, growth acceleration in top accounts and strong OCF generation. Digital business grew 17.4% y-o-y. Management expects a sequential revenue growth in Q4FY2021, implying a high-single digit revenue growth in FY2021. Management remains confident on delivering top quartile revenue growth in the industry in FY2022E with a stable margin. LTI could deliver industry-leading growth over next few years, led by large deal ramp-ups, deep relationship with top accounts, addition of new logos, consistency in deal wins and robust partner ecosystem. Expect LTI’s USD revenue/earnings to clock a CAGR of 16%/19% over FY2021-FY23E. .

Outlook

We stick to our Buy rating on L&T Infotech (LTI) with a PT of Rs. 4,800, anticipating that it would clock industry-leading growth.