Buy Cholamandalam Investment and Finance Company; target of Rs 1531: KR Choksey

KR Choksey is bullish on Cholamandalam Investment and Finance Company has recommended buy rating on the stock with a target price of Rs 1531 in its research report dated October 30, 2024.

Broker Research

October 30, 2024 / 13:13 IST

Buy

26 Aug, 2025 12:21

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KR Choksey's research report on Cholamandalam Investment and Finance Company

CIFC reported a healthy operating performance, which was largely in-line with our expectations. Net Interest Income (NII) for Q2FY25 stood at INR 27,128 Mn, a growth of 34.6% YoY (+5.4% QoQ), led by strong business momentum. NII was 3.7% higher than our estimates. PreProvision Operating Profit was at INR 19,221 Mn, an increase of 35.3% YoY/ 3.9% QoQ. Profit after Tax (PAT) for Q2FY25 was INR 9,631 Mn, reporting a growth of 26.3% YoY (+2.2% QoQ). Net profit was 1.2% higher than our estimates. Asset quality has seen a slight uptick, but management expects improvement in H2FY25E, driven by seasonal factors and economic recovery. Given the pressure on the asset quality and moderation in the growth outlook, we have reduced our multiple.

Outlook

We assign a P/ABV multiple of 5.5x (earlier 6.3x)to the FY26E adj. BVPS of INR 278.3 to arrive at a target price of INR 1,531/share (earlier INR 1,603), implying an upside of 18.5%. Accordingly, we reiterate our rating of the shares as “BUY”.

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