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Buy Cholamandalam; tgt of Rs 181: A. K. Stockmart
A. K. Stockmart is bullish on Cholamandalam Investment and Finance Company and has recommended buy rating on the stock with a target of Rs 181 in its July 14, 2010 research report.
A. K. Stockmart is bullish on Cholamandalam Investment and Finance Company and has recommended buy rating on the stock with a target of Rs 181 in its July 14, 2010 research report.
"We forecast an EPS CAGR of 68% over FY10-12E and expect its ROE to improve from 2% in FY 10 to 7.8% by FY 12E, despite two large equity dilutions in this period. We expect Cholamandalam Investment and Finance Company's CAR to remain at around 15%, versus the regulatory requirement of 12%. And credit cost to fall from 3.8% in FY 09 to 2% in FY 12E on back of improved asset quality. We believe that current valuations of 1.8x FY1E BV do not factor the sharp turnaround in business, strong financial performance and reducing NPA and re-rating may be on the cards. We initiate buy rating on the stock with a price target of Rs 181," says A. K. Stockmart research report.
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