Moneycontrol
Apr 24, 2018 03:21 PM IST | Source: Moneycontrol.com

Buy Cholamandalam Investment & Finance; target of Rs 1767: HDFC Securities

HDFC Securities is bullish on Cholamandalam Investment & Finance has recommended buy rating on the stock with a target price of Rs 1767 in its research report dated April 24, 2018.

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HDFC Securities' research report on Cholamandalam Investment & Finance


CIFC  ended  FY18  on  a high, with a strong beat in 4Q. The 18% sequential acceleration  in  disbursals  (especially  in  the  Vehicle Finance slice), coupled  with  the  steady  NIM  uptick  (8.70%,  +30bps QoQ) led to a core earnings  beat of ~6%. Though costs were at a multi-qtr high, justification was  visible  in  the  stark reduction in GNPAs to 2.94% (higher incentives paid  for  collection) and the rapid expansion in reach (170 in the past 12 months).

Outlook

RoAAs  are  set  to expand 15bps over FY18-20E  as  oplev  benefits  flow  in.  With best-in-class return ratios, premium  valuations  are  justified. Maintain BUY with a TP of Rs 1,767 (4x Mar-20 ABV of Rs 442).

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.

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