Buy Cholamandalam Investment and Finance Company: target of Rs 520: Sharekhan

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Sharekhan's research report on Cholamandalam Investment and Finance Company

Cholamandalam Investment and Finance Company (CIFC) is well placed to benefit as macro factors turn favourable (lower borrowing costs, healthy offtake in auto sales); a combination of strong collections and high provisions for CIFC also provides comfort. Growth outlook is improving for vehicles finance NBFCs, along with lower credit cost (improving collections) fuelling improved earnings estimates. At the CMP, the stock is available at 4.1x/3.3x its FY2022E/FY2023E ABVPS, supported by improved growth outlook, backed by its superior performance throughout cycles, high medium-term RoEs, and strong management at the helm; we have fine-tuned our estimates accordingly.

Outlook

We maintain our Buy rating with a revised price target of Rs. 520.

For all recommendations report, click here

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