Motilal Oswal's research report on Cholamandalam Investment and Finance Company
Cholamandalam Inv. & Finance (CIFC)’s 2QFY26 PAT grew ~20% YoY to INR11.5b (in line). PAT grew ~20% YoY in 1HFY26, and we expect its PAT to grow ~21% YoY in 2H. CIFC’s NII grew ~25% YoY to ~INR33.8b in 2QFY26 (in line). Other income grew ~33% YoY to ~INR7b (~5% below est.), driven by higher fee income and assignment income of ~INR764m (PQ: INR1.5b). CIFC’s opex rose ~23% YoY to ~INR16.2b (in line), and the cost-income ratio declined ~1pp QoQ to ~40% (PQ: 38% and PY: 41%). The sequential increase in opex was due to variable compensation/incentives and investments in building the gold and CD business. PPoP grew ~28% YoY to INR24.6b.
Outlook
We estimate a CAGR of ~20%/25% in AUM/PAT over FY25 28 for an RoA/RoE of 2.7%/20% in FY28E. We reiterate our BUY rating with a TP of INR1,935 (premised on 4x Sep’27E BVPS).
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Cholamandalam Investment and Finance Company _10112025_Motilal Oswal
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