Motilal Oswal has maintained its 'Buy' rating on Bajaj Finserv with a target price of ₹2,490, following management interactions in Singapore and Hong Kong. According to reports from Motilal Oswal, the brokerage believes the group's focus is increasingly shifting from chasing market share to generating higher-quality, more profitable growth across its businesses.
Motilal Oswal sees the insurance businesses as an important part of the group's strategic transition. Bajaj General Insurance has continued to protect market share while maintaining one of the industry's strongest combined ratios, even as it has chosen to walk away from volumes where pricing is uneconomic. Bajaj Life Insurance has improved its product mix by reducing its dependence on lower-margin ULIPs and increasing its focus on protection, guaranteed-return products and annuities.
The newer businesses including health, markets and asset management are also growing while narrowing losses. As reported by Motilal Oswal, the brokerage expects scale to progressively improve their profitability, potentially turning them into contributors to consolidated earnings. The group is also expanding its financial-services footprint, with plans to enter wealth management and pensions.
The Board has additionally approved a reinsurance business, initially focused on India and potentially expanding overseas once it achieves scale and suitable credit ratings. According to Motilal Oswal, Bajaj Finserv's strong balance sheet gives it room to pursue such opportunities while Bajaj Finance continues to drive earnings growth. The brokerage believes the combination of lending, higher-margin insurance growth and improving digital businesses should provide greater visibility on consolidated earnings and support long-term value creation.
