Moneycontrol
Get App
Last Updated : Aug 01, 2019 02:05 PM IST | Source: Moneycontrol.com

Buy Cholamandalam Inv and Fin; target of Rs 315: Motilal Oswal

Motilal Oswal is bullish on Cholamandalam Inv and Fin has recommended buy rating on the stock with a target price of Rs 315 in its research report dated July 31, 2019.

Broker Research @moneycontrolcom
 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

Motilal Oswal 's research report on Cholamandalam Inv and Fin


1QFY20 PAT grew 10% YoY to INR3.1b (6% below our est.). While operating profit was in line, higher credit drove the miss v/s our expectations. CIFC's disbursements grew 22% YoY to INR85.7b (v/s our est. of 7%). In vehicle finance, the company grew in all segments, barring HCVs (down 30% YoY). As a result, AUM was up 6% QoQ/ 27% YoY to INR574b. Home Equity AUM growth of 17% YoY was the highest in the past 11 quarters. NIM (calc.) on AUM compressed 20bp QoQ /60bp YoY to 6.7% as cost of funds increased 10bp QoQ /20bp YoY. Borrowing mix remained largely unchanged, barring debentures (share reduced to 17% from 21% sequentially) and term loans (share increased to 56% from 53% in the previous quarter). Opex grew 24% YoY to INR3.5b. C/I ratio increased ~250bp to 37%. The company opened ~100 branches during the quarter.


Outlook


However, we look to closely monitor two factors - margin trajectory and asset quality. We upgrade our FY20/FY21 EPS estimates by 2-5% to account for stronger growth. Buy with a TP of INR315 (2.7x FY21 BVPS).


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.



Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.
First Published on Aug 1, 2019 02:05 pm
Sections
Follow us on
Available On