HDFC Securities's research report on Cholamandalam Investment & Finance
CIFC’s business momentum sustained through 1Q even though reporting changes (under IND AS) created some ambiguity. Disbursement growth (+45% YoY) continued to dazzle, with VF leading the way. Though a higher share of lower-yielding HCV business (18% of VF disbursements vs. 11% YoY) dented margins partially, the 47bps dip could largely be attributed to the IND AS shift. Management’s attribution of lower costs to increasing oplev (~50bps improvement) was a key positive.
Outlook
We remain constructive despite rich valuations, as best-in-class return ratios will continue to inch up (14bps over FY18-20E). Maintain BUY with a TP of Rs 1,764 (4x Mar-20 ABV of Rs 441).
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Read More
