Sharekhan's research report on Cholamandalam Investment and Finance Company
For Q1FY23, Cholamandalam Investment Finance Company’s PAT lagged our estimates at Rs. 566 crore versus Rs. 595 crore, on account of higher provisions. PAT grew by 73% y-o-y and was down by 18% q-o-q. Disbursements increased by 267% y-o-y (5% q-o-q), Q1FY22 being a lower base. It recorded highest quarterly disbursement of Rs. 13,329 crore. The company witnessed overall improvement in the consumer confidence, which drove disbursements higher during the quarter. Asset quality improved sequentially by 21bps with stage-3 assets at 4.16%. GNPAs, as per revised RBI norms, was at 6.31% in Q1FY23 as against 6.82% in Q4FY22.
Stock trades at 4.2x/3.5x its FY2023E/FY2024E BVPS. We maintain a Buy on Cholamandalam Investment Finance Co. with a revised PT of Rs. 830.
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