KR Choksey's research report on Cholamandalam Investment and Finance Company
CIFC reported a robust performance, and it was a beat across all the headline numbers. Net Interest Income (NII) for Q4FY24 stood at INR 23,548 Mn, a growth of 33.4% YoY (+8.5% QoQ), led by strong business momentum. NII was higher than our estimates primarily led by higher AUM growth and slightly lower cost of funds than expected. Profit after Tax (PAT) for Q4FY24 was INR 10,581 Mn, reporting a growth of 24.1% YoY/ 20.8% QoQ. The net profit was higher than our estimates based on lower provisions and strong operating performance.
Outlook
We assign a P/ABV multiple of 5.8x to the FY26E adj. BVPS of INR 251.3 to arrive at a target price of INR 1,455/share (earlier INR 1,380), implying an upside of 19.0%. Accordingly, we revise our rating to “BUY” from ACCUMULATE on the shares considering the growing optimism in the sustaining a healthy business momentum and profitability.
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