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Buy Cholamandalam Investment & Finance; target of Rs 1764: HDFC Securities

HDFC Securities is bullish on Cholamandalam Investment and Finance has recommended buy rating on the stock with a target price of Rs 1764 in its research report dated July 27, 2018.

September 18, 2018 / 02:12 PM IST
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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.


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


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