Reduce Cholamandalam Investment; target of Rs 1250: Emkay Global Financial

Emkay Global Financial recommended reduce rating on Cholamandalam Investment with a target price of Rs 1250 in its research report dated January 30, 2024.

Broker Research

February 03, 2024 / 13:35 IST

reduce

26 Aug, 2025 12:21

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Emkay Global Financial's research report on Cholamandalam Investment

CIFC reported a steady performance in Q3FY24, with higher non-interest income (cross-selling fee income, FLDG income, etc) and lower credit cost helping the company deliver ~2.5% RoA. Despite some planned pull-back in partnership-led unsecured lending, growth in the overall non-vehicle segments led by LAP and home loans (HLs) stayed robust. Going forward, the management remains confident about resilient AUM growth led by non-vehicle finance benefiting from an increase in geographical footprint and product offerings. Considering the Q3FY24 developments, we adjust our FY24-26 estimates which leads to a ~5% EPS cut owing to minor compression in NIM and slight increase in OpEx.

Outlook

We reiterate REDUCE on the stock, with Dec-24E TP of Rs1,250/sh (implying FY25E P/B of 4.5x; reduced from Rs1,350 earlier), as at the current rich valuations, the stock seems to be priced to perfection.

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