Sharekhan's research report on Cholamandalam Investment and Finance Company
Q4FY22 PAT beat our estimate and stood at Rs. 690 crore versus Rs. 584 crore, rising ~184% y-o-y and ~32% q-o-q aided by lower provisioning. The company had provision write back of Rs.17 crore versus Rs. 248 crore in Q3FY22. It clocked strong disbursements growth of ~58% y-o-y and ~22% q-o-q to Rs. 12,718 crore in Q4FY22 led by robust growth in vehicle finance (up by 43% y-o-y) and mortgage book (up by 57% y-o-y). Asset quality improved with stage-III assets at 4.37% in Q4FY22 from 5.85% in Q3FY22, down by ~150 bps q-o-q, due to better collection efficiency. Management stated that there were strong signs of recovery in auto and mortgage segments and new businesses launched in December 2021 too witnessed significant disbursements.
The stock trades at 3.6x/2.9x its FY2023E/FY2024E BVPS. We maintain our Buy rating with a revised PT of Rs. 740.
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