Investor's Eye: Update - Bajaj Finance; MF - Sharekhan's top equity mutual fund picks, Sharekhan's top SIP fund picks

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Investor's Eye [June 12, 2014]  Sharekhan www.sharekhan.com

Summary of Contents STOCK UPDATE     Bajaj Finance Recommendation: Buy Price target: Rs2,315 Current market price: Rs2,085   Asset quality to remain healthy, maintain Buy   Key points In response to recent media reports suggesting a fraud in Bajaj Finance's mortgage lending business, the company's management has clarified that the accounts in question are very few in number (10-12 accounts) and that such accounts would require additional provisioning of Rs5 crore in the worst case. Moreover, it does not expect any risk of delinquencies as the said advances are backed by strong collaterals. Traditionally also, the NPAs in SME mortgages have been quite low at below 10BPS (5-7BPS) of the advances. The company has sacked the erring employees and replaced the business head (internal transfer) immediately to avoid any loss of business. It has also maintained the guidance of a 20-25% growth in the advances in FY2015.  We believe that given the group pedigree (Bajaj group), this incident could be taken as a one-off event with no material impact on the company's financials. We also derive comfort from the conservative accounting and provisioning practices followed by the company. We, therefore, maintain our rating and price target for Bajaj Finance (price target: Rs2,315) and Bajaj Finserv (price target: Rs1,075). MUTUAL GAINS     Sharekhan's top equity mutual fund picks   Large-cap funds Mid-cap funds Multi-cap funds Birla Sun Life Top 100 Fund - Growth Axis Midcap Fund ICICI Prudential Value Discovery Fund Birla Sun Life Frontline Equity Fund - Plan A Mirae Asset Emerging Bluechip Fund Birla Sun Life Equity Fund ICICI Prudential Focused Bluechip Equity Fund - Ret Religare Invesco Mid N Small Cap Fund HSBC India Opportunities Fund Principal Large Cap Fund HDFC Mid-Cap Opportunities Fund HDFC Equity Fund HSBC Equity Fund Principal Emerging Bluechip Fund HDFC Top 200 Indices Indices Indices BSE Sensex BSE MID CAP BSE 500 Tax-saving funds Thematic funds Balanced funds Reliance Tax Saver (ELSS) Fund Franklin Build India Fund ICICI Prudential Balanced Principal Tax Savings Fund Birla Sun Life Infrastructure Fund - Plan A Tata Balanced Fund - Plan A ICICI Prudential Taxplan DSP BlackRock India Tiger Fund - Reg HDFC Prudence Fund HDFC Taxsaver Canara Robeco Infrastructure Fund HDFC Balanced Fund HDFC Long Term  Advantage Fund HDFC Infrastructure Fund Birla Sun Life 95 Indices Indices Indices CNX500 S&P Nifty (CNX Nifty) Crisil Balanced Fund Index   Fund focus Birla Sun Life Fund     Sharekhan's top SIP fund picks  Large-cap funds Multi-cap funds Birla Sun Life Top 100 Fund ICICI Prudential Value Discovery Fund Birla Sun Life Frontline Equity Fund - Plan A Birla Sun Life Equity Fund Principal Large Cap Fund HDFC Equity Fund ICICI Prudential Focused Bluechip Equity Fund - Ret HSBC India Opportunities Fund HSBC Equity Fund HDFC Top 200 BSE Sensex BSE 500 Mid-cap funds Tax saving funds Principal Emerging Bluechip Fund Reliance Tax Saver (ELSS) Fund Religare Invesco Mid N Small Cap Fund Principal Tax Savings Fund HDFC Mid-Cap Opportunities Fund ICICI Prudential Taxplan Sundaram Select Midcap - Reg HDFC Taxsaver IDFC Premier Equity Fund - Reg HDFC Long Term  Advantage Fund BSE Midcap CNX Nifty   Fund focus HDFC Equity Fund   Click here to read report: Investor's Eye   Sharekhan Limited, its analyst or dependant(s) of the analyst might be holding or having a position in the companies mentioned in the article.

Regards,  The Sharekhan Research Team

 

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