Religare is bullish on Cholamandalam has recommended Buy rating on the stock with a target price of Rs 1000 in its research report dated May 03, 2016.
Religare's research report on Cholamandalam
CIFC’s Q4FY16 PAT increased 42% YoY to Rs 1.9bn, largely on account of an 8% QoQ drop in provisions and well-managed operating expenses (+10% YoY). Disbursement growth was strong at 41% YoY while AUM increased 17% YoY. Asset quality improved with GNPA/NNPA declining to 3.5%/2.1%. CIFC will migrate to 90dpd NPA recognition by FY17, well ahead of the regulatory timeline. We raise FY17/FY18 earnings by 10% each on better margins and operating leverage. BUY with a Mar’17 TP of Rs 1,000 (from Rs 850 earlier).
We have upgraded our FY17/FY18 earnings estimates by ~10% each, given the improvement in margins and decline in operating cost ratios. Maintain BUY with a Mar’17 TP of Rs 1,000 (revised from Rs 850 earlier).
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