Stock Snapshot
Price Performance
Recommendation Rationale
Strong growth outlook supported by diversified strategies and improving asset quality.
Basis of our Recommendation
Cholamandalam Investment and Finance Company Limited is on a robust growth trajectory, with projected AUM growth of 20-23% for FY27 driven by strong performance across multiple segments, particularly Vehicle Finance and Home Loans. The company is strategically expanding its branch network and enhancing asset quality, which is expected to improve profitability metrics. However, potential risks include global uncertainties and temporary demand moderation due to procedural delays.
Why We Like This Stock
- Projected AUM growth of 20-23% driven by multiple business segments
- Strategic expansion of branch network to enhance market penetration
- Improving asset quality with declining credit costs
Things To Watch Out For
- Potential global uncertainties impacting market conditions
- Temporary moderation in home loan disbursements due to procedural delays
Key Parameters
Financial Snapshot
| Actuals | Forecast | ||||
|---|---|---|---|---|---|
| FY24 | FY25 | FY26 | FY27 | FY28 | |
| Revenue (Cr.) | 9,932 | 13,395 | 16,689 | 20,527 | 24,733 |
| Profit Before Tax (Cr.) | 4,606 | 5,743 | 6,977 | 9,773 | 12,085 |
| PBT Margin | 46.4% | 42.9% | 41.8% | 47.6% | 48.9% |
| Net Profit (Cr.) | 3,381 | 4,019 | 4,963 | 6,952 | 8,597 |
| EPS | 39.7 | 47.1 | 58.2 | 81.5 | 100.8 |
Company Overview
Show Company Profile
Cholamandalam Investment and Finance Company Limited, operates as a non-banking finance company in India. The company operates through Vehicle Finance, Loan Against Property, Home Loans, and Other Loans segments. It offers loans for commercial vehicles, passenger vehicles, two- and three- wheelers, and tractors, as well as construction equipment. The company also provides secured loans against property, and home and SME loans, as well as consumer and small enterprise loans, including personal loans, professional loans, and business loans to salaried, self-employed professional and non-professional customers, and micro and small businesses. In addition, it offers gold loans, consumer durable loans, corporate insurance agencies, stockbroking and depository participants, offline payment aggregator, home extension, balance transfer of existing loans, supply chain finance, and secured term loans. Further, the company provides dealer portal services under the Gaadi Bazaar brand, which act as a hub for dealers in listing vehicles, generating leads, and applying for loans and trade advances. Additionally, it operates Payswiff, an omnichannel payment transaction solution that lets business owners accept payments from their customers in-store, at-home deliveries, online and on-the-go using mPOS, and POS solutions. The company was incorporated in 1978 and is headquartered in Chennai, India.