Axis Direct's research report on Cholamandalam Investment
CIFC posted a stellar Q3 with 53% YoY growth in PAT to Rs 2.5 bn (higher than our and consensus estimates). Strong earnings growth was backed by uptick in disbursements (up 55%/23% YoY/QoQ) and improvement in asset quality with ~80 bps QoQ decline in GNPA ratio to 3.7%. AUM growth at 20% YoY was highest in past 15 quarters.
OutlookMaintain BUY with rolled forward TP of Rs 1,550 (valued at 3.6x FY20 ABV): We continue to like CIFC for its welldiversified vehicle finance (VF) book, voluntary slow-down in home equity (HE) portfolio, investments in tech (that will drive operating leverage) and newer products like trip finance and home loans (which yield results post a couple of years). At CMP, CIFC trades at 3.6x/ 3x FY19E/ FY20E ABV of Rs 356/ Rs 425.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.