Moneycontrol PRO

Hold Cholamandalam Investment; target of Rs 1075: Axis Direct

Axis Direct recommended hold rating on Cholamandalam Investment with a target price of Rs 1075 in its research report dated February 02, 2017.

February 03, 2017 / 01:47 PM IST
  • bselive
  • nselive
Todays L/H

Axis Direct's research report on Cholamandalam Investment

CIFC’s PAT (Rs 1.6 bn, up 12% YoY) was below our expectation due to one-off expenses (Rs 280 mn) and higher than expected 30% QoQ rise in provisions (RBI forbearance on NPA recognition not taken). Growth in disbursements did take a hit from demonetization (down 30% YoY in Home equity segment and up a paltry 8% in vehicle finance). Consequently, AUM growth moderated to 17% YoY (LAP book flat YoY).

Asset quality deteriorated, with GNPA (%) rising 30bps QoQ to 3.8% led by stress in the vehicle portfolio (esp. tractors). Management stated cash crunch as the main reason for the pressure on GNPAs. Management indicated a slightly tepid outlook on demand as a result of economic disruption in end-customer business models. Maintain HOLD on rich valuations.

For all recommendations, click here

The views and investment tips expressed by investment experts/broking houses/rating agencies on are their own, and not that of the website or its management. advises users to check with certified experts before taking any investment decisions.
ISO 27001 - BSI Assurance Mark