Buy Cholamandalam Inv & Fin; target of Rs 1930: Motilal Oswal

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Motilal Oswal's research report on Cholamandalam Inv & Fin

Cholamandalam Investment and Finance’s (CIFC) 4QFY18 PAT grew 32% YoY to INR2.9b, a 6% beat.CIFC had another strong quarter on the vehicle finance front. Disbursements grew 55% YoY and AUM grew 33% YoY. At the same time, GNPL ratio in this segment declined 74bp QoQ to 2.04%. This is lower than even the number reported on 180dpd basis in FY15.

Outlook

We expect AUM to register high-teens CAGR over the medium term. The improvement in margins is encouraging. We increase our FY19/20 estimates by 4-5% and re-iterate Buy with a TP of 1,930 (4x FY20E book).For all recommendations report, click here

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