Shares of Bajaj Finance gained over 4 percent on Thursday after brokerages maintained an optimistic view of the company’s earnings prospects. They expect the the company to make a speedy recovery when economic conditions improve.

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The stock rallied 4.48 percent to touch intraday high of Rs 2,258 apiece on the BSE. So far this year, shares of the company have fallen 49.77 percent.

Morgan Stanley expects Bajaj Finance to have above-industry return on equity (RoE) in FY21 and believes it should bounce back the fastest as conditions improve. It had an 'overweight' call on the stock, with a target price at Rs 2,740 apiece.

"Structural asset growth and RoE potential have been expanding, while valuations are also attractive at current levels," Morgan Stanley said.

HSBC had a 'buy' call on the stock with the target price at Rs 3,700 per share, implying a 71 percent upside from current levels.

“We may see 'in-house' spending being favoured against 'out-of-home' spending. Financing needs are set to rise as consumers and companies push for no-cost EMI,” HSBC said.

The global research house feels that the COVID-19 crisis may drive a marked change in spending patterns of consumers. Growth moderation may be less in the medium term than feared by the market, it added.

At 1:55 pm, shares of Bajaj Finance traded 2.47 percent higher at Rs 2,214.50 on the BSE.

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