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UBS upgrades Bajaj Finance shares, LT Finance as it sees NBFCs better placed than banks. Here’s why

economictimes.indiatimes.com · 23h · first reportShare

Shares of Bajaj Finance and L&T Finance gained up to 3% on Wednesday after international brokerage UBS upgraded the two stocks to Neutral and Buy, respectively.UBS sees scope for a re-rating as the unsecured lending cycle revives. It also expects asset quality to remain robust.With a revised target price of Rs 1,110, UBS analysts forecast an upside potential of 9% in Bajaj Finance, while a hiked target price of Rs 380 implies an upside of about 25% from current market levels. In Wednesday’s session, Bajaj Finance rose 3% to Rs 1,025, while LT Finance was up 3% to Rs 313.“We upgrade our rating on Bajaj Finance from Sell to Neutral, as we expect cyclical EPS upgrades on yield-accretive growth and strong asset quality, though its valuation remains demanding,” UBS said in a note. “We also upgrade our rating on L&T Finance from Neutral to Buy, expecting faster personal loan growth and ROA improvement toward 3%,” it added.UBS on Bajaj Finance shares“We believe BAF has cleared its asset quali